The startup Uber, the fast-growing on-request transportation company, is back into the funding game after raising $2 billion in June and December last month. Start up financing is trying to catch up with the over speeding technological changes that has been recently happening in the speed of lightning.
The recent funding could increase the worth of the company to more than $50 billion, Which is somewhat like Facebook in its private funding before going public. It is even expected to overtake the highly valued private startup smartphone maker Xiaomi that was worthy of $45 billion in the recent funding round. The increased rate of financing to the company is because of the strategic investors and the readiness of the entrepreneurs to cuddle the money.
Mark Suster, a partner at the venture capital firm Upfront Ventures said, “When capital markets are this loose, people tap them, whether it’s right to or now.” He also added, “Companies are raising rapid rounds of capital for only one reason – They can.” Anand Sanwal, chief executive of CB Insights, a research from that studies venture capital said, previously the consecutive fund-raising would happen in years but now things have changed. Multiple fund-raising are happening in months instead of years.
The fund-raising for the startups in the previous decades has become so different from the current state. It was normal then to leave a gap of year or two between every fundraising event. LinkedIn, when raised money as startup in mid-2000s, it took the company more than three years to raise its first three rounds of funding. The decrease in the gap between two rounds only shows how quickly the startups reach high valuation and how easily the company are able to manage the increasing fund.
Mark.A Siegal, managing director of Menlo Ventures (a venture capital firm) stated that many international company and financial institutions are ready to pour money into the startups like Uber which is growing at a fast phase. “I do not blame entrepreneurs. This is something where investors are absolutely complicit in this, and in some ways are driving this,” he added.
Uber has been growing at lightning speed, after all. With all the new sources of funding it is ready to experiment and expand with new services and products that could become the sub product of the huge logistics network it has built. It’s recent products are UberEATS, UberEssentials and UberRush. The company is also bidding against many other big companies to purchase HERE maps from Nokia for around $3 billion.
Until now, Uber has not officially declared or commented on it.