# Uber is raising another $1 billion and could soon be worth $70 billion



## John Deer (Feb 12, 2015)

http://www.businessinsider.com/uber-raising-another-round-2015-10
Uber is raising another $1 billion in new venture-capital financing in a deal that would value the car-hailing startup at between $60 billion and $70 billion, The New York Times reports.

This round would come just three months after Uber raised $1 billion for its China branch. It would also be Uber's eighth round in five years.

Earlier this week, Uber CEO Travis Kalanick said that the company was "nowhere near" going public.

Those remarks came after Bill Gurley, superstar venture investor and Uber board member, warned startups not to stay private for too long.

Uber is already said to be valued at more than $50 billion, making it higher than Facebook's valuation at its last private round in 2011.

Uber did not respond to a request for comment at post time.


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## Jamesh (Sep 5, 2015)

Uber cannot afford to open books for public view. It is still scamming investors as well as drivers. This would all come out in the open. How many law suits has it settled and how many are still subject to adjutacation? I lived in China for 3 years where frequent bus fares were 12 cents anywhere in the city and taxis were 50 cents. This was 7 years ago. No tipping is the rule there. Don' t bring that American custom here, is the response of my neighbors in the PRC.


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## Uberselectguy (Oct 16, 2015)

From everything I read, the word on the street is that Uber is hemmoraging money at a fatal rate. Why else would they not go IPO? VC money is very expensive, lots of restrictions. Going public is like opening the money machine. But, no Wall Street underwriter will write a IPO for a company going broke.
High interest, high equity VC or IPO ... do the math.

Ubers model is failing due to driver turnover and massive turnover expenses. Not sustainable. A large strike would flatten them.


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## andaas (May 19, 2015)

To be clear, "VALUATION" does not equal "WORTH". Stupid reporter/headline.


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## riChElwAy (Jan 13, 2015)

andaas said:


> To be clear, "VALUATION" does not equal "WORTH". Stupid reporter/headline.


valuation is used as the marker .. it is a necessary thing when bringing in new funding .. so if they're now buying in at a $70 billion marker that means the company must rise in valuation to over $70 billion in order for that investment to earn a profit .. who in the hell is setting these markers ? ? this company does not turn a profit, it loses more cash than it receives in top line revenues .. it seems that this VC $$ is being used to subsidize the loss in operating "income" .. but nonetheless, the higher the valuation keeps going the deeper the hole gets for the newer investors


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## Taxi Driver in Arizona (Mar 18, 2015)

A billion here and a billion there, pretty soon it starts to add up.

I see a looming fight between Uber's board and their investors over their inability to turn a profit.


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## andaas (May 19, 2015)

The world view of Uber is that there are hundreds of thousands of drivers driving on the platform, working part time, and earning $90k a year in fares. If you factor in the 20-28% take of those earnings, it's a staggering amount of cash flow.

The fictional monthly take on 100,000 drivers earning $90k a year in fares would be $165,000,000; or $1,980,000,000 a year. (I used 22% to average lower/higher commissions).

That is only 100,000 drivers, Uber is said to have more than 160,000 drivers in California alone.

It's all smoke and mirrors.


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## Uberselectguy (Oct 16, 2015)

Taxi Driver in Arizona said:


> A billion here and a billion there, pretty soon it starts to add up.
> 
> I see a looming fight between Uber's board and their investors over their inability to turn a profit.


Over my career in high tech in the Silicon Valley, I sat in many a Venture Capital conference, more than two dozen at least. I can assure you that VC partners protect themselves on the downside. For every dollar they fund, whether it's round one or four, they grab equity and control. They vote on who occupies key roles ( CEO,CTO,COO,CBD ) and often times put their people that have proven track records into the key positions. I've seen many a CEO get fired from VC votes when the core company turned south. Travis's job security can be measured day by day. As well, VC partners drive hard deals as to buyouts, so the CEO doesn't get huge dollars if he is fired. Venture Capital is a mean, lean game. The infusion of cash is nice, the flip side loss of equity and control is a nightmare for some.
Travis appears to be following his past track record as a carpet bagger, which means he is a better salesman than he is a leader. In the past, his failures can be attributed to zero foresight and lack of macro management. Instead he tries to manage in micro terms. His driver turnover rate and loss of high quality drivers typifies this fact. 
So my short term guess is that Travis will either be fired or demoted to a board member position. Daily operations will be directed by a proven CEO with a solid track record. The negotiations are more than likely taking place right at present.
VC partners want Uber to go public. With Travis at the helm, it's going to be a long while. Ain't good for Travis.


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## Taxi Driver in Arizona (Mar 18, 2015)

Did Uber ever fill the CFO position after the last guy quit?


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## Uberselectguy (Oct 16, 2015)

Ubers biggest issue right now is not filling top slots, it's explaining to VC partners it's ever growing battle with regulatory push backs, markets being crippled by rider discontent and driver turnover.

Regulatory push backs are fueled by a growing number of rider complaints and the fact that licensed carriers have an established voice with the PUC, city governments and congress level lobbies.

Rider complaints of safety, pricing and potential fraud are on the rise. Word travels very fast. 

Driver turnover is growing at much to high a percentage than to be managed. The cost of advertising to bring on new drivers is expensive. Good drivers are replaced with undesirable ones, Uber is headed straight towards a driver pool of low quality.


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## Taxi Driver in Arizona (Mar 18, 2015)

So at what point do the VCs decide enough is enough and stop giving these idiots any more money to piss away?


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## SharedRideTruther (Aug 20, 2015)

John Deer said:


> http://www.businessinsider.com/uber-raising-another-round-2015-10
> Uber is raising another $1 billion in new venture-capital financing in a deal that would value the car-hailing startup at between $60 billion and $70 billion, The New York Times reports.
> 
> This round would come just three months after Uber raised $1 billion for its China branch. It would also be Uber's eighth round in five years.
> ...


The top .01% of Russia, China, Venezuela, etc will HATE this response.

*Click HERE to read my Thread*

It's too late.

Short of civil unrest, it's too late.


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## Oscar Levant (Aug 15, 2014)

John Deer said:


> http://www.businessinsider.com/uber-raising-another-round-2015-10
> Uber is raising another $1 billion in new venture-capital financing in a deal that would value the car-hailing startup at between $60 billion and $70 billion, The New York Times reports.
> 
> This round would come just three months after Uber raised $1 billion for its China branch. It would also be Uber's eighth round in five years.
> ...


these valuations are meaningless, a business is only worth what someone is willing to pay for it-- no one is going to pay 70 billion for Uber. Uber has no assets no fleets , just some offices and some computers and I doubt it's even making a profit . this is fantasy


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## John Deer (Feb 12, 2015)

Oscar Levant said:


> these valuations are meaningless, a business is only worth what someone is willing to pay for it-- no one is going to pay 70 billion for Uber. Uber has no assets no fleets , just some offices and some computers and I doubt it's even making a profit . this is fantasy


These valuations are _not_ meaningless:

Investors would only see a profit if the company goes public (or is bought) at an even _higher_ valuation.
In all likelihood, the terms or the investment include all kind of "ratchets" which would protect the investors if the company needs to raise money at a _lower_ valuation (in the expense of Travis and co.). Silicon Valley (the TV show) has a whole episode on valuation and why high valuation is not always what the company wants


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## SECOTIME (Sep 18, 2015)

They sure don't mind throwing $100 bills around to get you to sign up your friendzies.

Btw that is a great show and that episode nailed it

Shark tank is entertaining as well.


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## Dontmakemepullauonyou (Oct 13, 2015)

Oscar Levant said:


> these valuations are meaningless, a business is only worth what someone is willing to pay for it-- no one is going to pay 70 billion for Uber. Uber has no assets no fleets , just some offices and some computers and I doubt it's even making a profit . this is fantasy


What uber has is 400,000 in America using their own cars and thinking they are making money but they are only wasting their time and pulling equity out of their cars.

My estimates on uber profit in America alone is:
400,000 drivers
Average $250 in fares a week($50 uber fees at 20%)
$50 fee x 52 weeks = $2,600
$2,600 x 400,000 = $1,040,000,000

So uber by my estimates are making $1billion a year in fees from the American market. I don't think they are spending more than $100mil on advertising for drivers/riders and no more than $200mil on the operations and payrolls of uber employees.

At this point on America alone uber is taking in about 700mil in profit. Add up the whole world and in no time they could be pulling in 5billion a year in profit.


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## TwoFiddyMile (Mar 13, 2015)

Uber is worth ($70,000,000,000).
It's a DEBIT not a credit. 
Integer. 
They have it all backwards.


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## uber714 (Sep 20, 2015)

I'm sorry, 50+ billion and not public yet... something is odd and wrong... but then again, what do i know, i'm just a SOB uber x driver


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## John Deer (Feb 12, 2015)

Dontmakemepullauonyou said:


> At this point on America alone uber is taking in about 700mil in profit. Add up the whole world and in no time they could be pulling in 5billion a year in profit.


This would mean North America (I'm assuming you included Canada) would be responsible for only 15% of profits for Uber.
However, on other continents Uber is either competing with strong local entrants (e.g. China, India) or facing regulatory hell (Europe).
In addition, the US economy is about 25% of the world economy - I can't see why this would be different for taxis.
So, I think $2-2.5B is more likely than $5B.

But of course, Uber's valuation is not about current profits - it's about what they are going to make in a robot-taxi world when they can get rid of all those annoying drivers and drop the prices so low that owning a car would be a luxury (even in LA).


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## John Deer (Feb 12, 2015)

uber714 said:


> I'm sorry, 50+ billion and not public yet... something is odd and wrong... but then again, what do i know, i'm just a SOB uber x driver


Just to put things into perspective - Facebook's last round of financing before its IPO was at $50B valuation. The IPO itself was at about $100B valuation.
Uber investors are probably also looking at 2x increase in valuation by IPO - or a *$140B* valuation (for perspective, GM and Ford _combined_ are currently worth $113B).

How much of that are you, as a SOB uber x driver are getting?


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## TwoFiddyMile (Mar 13, 2015)

John Deer said:


> Just to put things into perspective - Facebook's last round of financing before its IPO was at $50B valuation. The IPO itself was at about $100B valuation.
> Uber investors are probably also looking at 2x increase in valuation by IPO - or a *$140B* valuation (for perspective, GM and Ford _combined_ are currently worth $113B).
> 
> How much of that are you, as a SOB uber x driver are getting?


Not until Uber stops losing money.


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## Uberselectguy (Oct 16, 2015)

Dontmakemepullauonyou said:


> What uber has is 400,000 in America using their own cars and thinking they are making money but they are only wasting their time and pulling equity out of their cars.
> 
> My estimates on uber profit in America alone is:
> 400,000 drivers
> ...


Nice attempt at run rates, but your assumptions are flawed. The VC issues with Uber as I have come to understand are the huge fixed costs married to volitable variables. There is no data on how successful their ad campaigns are, but it is well known that their ad frequency is doubling across all media venues. Battling regulations, their state lobby expense in aggregate are 350 million per year as per the early year article in the WSJ. Buildings and payroll to staff likely fall into the service industry standard at 60%, numbers that are used as a general tool for profit analytics. With your assumption of GROSS income. You are high. The vast majority of Uber drivers are part time and as such their earnings fall well below $1000 a month. The sum average is more like $500 a month. That, coupled with ever growing competition may lessen in the months to come.
So, based on these numbers, Uber is loosing money. The European picture is yet worse. European markets come with much tighter controls and operating expenses. Europe, according to analysts reporting on Uber, carries the co census opinion that any potential profit picture is minimal at best.
Why do the VC's put money into uber? The upside is going public. On initial IPO launches, profitability is never expected. Run rates and brand recognition are the driving force to any IPO launch. I've been involved in three start-ups that went public, none of which were profitable. Then again, there are acquisitions.


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## TwoFiddyMile (Mar 13, 2015)

There's almost no European market. Uber has been banned in most of Western Europe.


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## John Deer (Feb 12, 2015)

Uberselectguy said:


> Then again, there are acquisitions.


Assuming Uber doesn't crash and burn, there's no one that _can_ buy Uber. An acquisition won't happen at $70B, but at a significantly higher valuation. _Maybe_ Apple (with over $100B in the bank and market cap of $674B) is rich enough, but that's about it.


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## The_One (Sep 9, 2015)

In other news, uber is hiring "renting" new drivers at a record pace, this new crop of drivers can't wait to earn those six figures that all these Taxi drivers have been earning for all these years, transporting all these lovely people from place to place, singing cumbai ya while doing so, yes I had a dream, the dream of becoming a Taxi driver, Uber made all my dreams come true, lol.


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## Oscar Levant (Aug 15, 2014)

John Deer said:


> These valuations are _not_ meaningless:
> 
> Investors would only see a profit if the company goes public (or is bought) at an even _higher_ valuation.
> In all likelihood, the terms or the investment include all kind of "ratchets" which would protect the investors if the company needs to raise money at a _lower_ valuation (in the expense of Travis and co.). Silicon Valley (the TV show) has a whole episode on valuation and why high valuation is not always what the company wants


I heard on the grapevine that Uber isn't operating in the black. This might be the big reason UBer wont' go public, for if they did, they'd have to make teir P/L's and balance sheets public, and I'll bet they don't look all that good, not 7o billion.


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## Oscar Levant (Aug 15, 2014)

Dontmakemepullauonyou said:


> What uber has is 400,000 in America using their own cars and thinking they are making money but they are only wasting their time and pulling equity out of their cars.
> 
> My estimates on uber profit in America alone is:
> 400,000 drivers
> ...


Having operated a few small businesses, your armchair estimates most certainly are far from the truth, there are so many hidden costs running a business, you have no idea. I did exactly as you did, once upon I time I predicted that a wedding photography biz would yeild an easy $80K per year, and the final result was far from the from that. The only thing that was correct was the number of weddings I would do, I predicted about 30 - 40 weddings per year, and did about 35 on the average, and netted a lot less. Evidence that profits are slim is Uber's nickling and diming it's drivers.


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## Dontmakemepullauonyou (Oct 13, 2015)

Oscar Levant said:


> I heard on the grapevine that Uber isn't operating in the black. This might be the big reason UBer wont' go public, for if they did, they'd have to make teir P/L's and balance sheets public, and I'll bet they don't look all that good, not 7o billion.


I don't think they will go public until at least 2018.

They got to the 70billion value based on rounds of funding uber by other billionaires. Basically they circle jerk each other to that value.

Once uber drivers cover 100% of the populated areas of the United States and they settle down with rate cuts and actually pay the drivers a living wage uber will easily be able to go public in the black.

Google I think would be the only company willing to buy uber for 100billion.

But I think Apple should buy uber, they can have the app built into every iPhone operating system and connected to iTunes accounts or Apple pay.


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## John Deer (Feb 12, 2015)

Dontmakemepullauonyou said:


> Google I think would be the only company willing to buy uber for 100billion.
> 
> But I think Apple should buy uber, they can have the app built into every iPhone operating system and connected to iTunes accounts or Apple pay.


Why would Google or Apple buy Uber?
Google is working on autonomous cars (and rumor has it is Apple). Once they have this technology perfected (5 to 10 years?), what do they need Uber for? Or drivers...


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## Dontmakemepullauonyou (Oct 13, 2015)

John Deer said:


> Why would Google or Apple buy Uber?
> Google is working on autonomous cars (and rumor has it is Apple). Once they have this technology perfected (5 to 10 years?), what do they need Uber for? Or drivers...


Uber is a brand. Google and Apple would not be able to compete with its brand name if they came out with something similar. Plus Google and Apple are making the software that will work the driverless cars, they will not be using their own driverless cars for taxi services. They will just sell/license the software and hardware that makes their cars driverless.


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## John Deer (Feb 12, 2015)

Dontmakemepullauonyou said:


> Uber is a brand. Google and Apple would not be able to compete with its brand name if they came out with something similar. Plus Google and Apple are making the software that will work the driverless cars, they will not be using their own driverless cars for taxi services. They will just sell/license the software and hardware that makes their cars driverless.


True, Uber is a brand, but how much is the brand worth?
According to Forbes (http://www.forbes.com/powerful-brands/list/), Apple's brand is worth $145B (!), while Google is at third place with $65B.
Uber is no where to be seen in the list which closes with Estee Lauder at #100 ($6B). Uber's brand is only a tiny part of its valuation.

When Apple decided to build a mobile phone, it didn't go out and buy a a mobile phone manufacturer. Nor did Google (they did buy Android - but for the _technology_, not for the brand). Besides, Uber's brand is a liability - Uber is not the nicest company out there. This will stick to anyone who buys them.


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## TwoFiddyMile (Mar 13, 2015)

Once uber drivers cover 100% of the populated areas of the United States and they settle down with rate cuts and actually pay the drivers a living wage uber will easily be able to go public in the black.

.[/QUOTE]

Wow, that's a fairytale outcome.
"And actually pay their drivers a living wage..."
Yeah, no.


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## Snipps&Trips (Jul 31, 2015)

They paid Beyonce 1 Million recently to perform at their Las Vegas party. The Uber elites are blowing thru the billions of infusion money and not kicking any of it back to the drivers. How does that make you all feel? Thanks for the rate reductions. If they ever get 40-60 billion stock whatever and not kick down equity or benefits, next day world wide strike.


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## John Deer (Feb 12, 2015)

Snipps&Trips said:


> They paid Beyonce 1 Million recently to perform at their Las Vegas party. The Uber elites are blowing thru the billions of infusion money and not kicking any of it back to the drivers. How does that make you all feel? Thanks for the rate reductions. If they ever get 40-60 billion stock whatever and not kick down equity or benefits, next day world wide strike.


If Uber wanted to give equity to drivers, it would have done so already - they should have done so with their _employees_ (stock options).
There is just no way that even if Uber wanted to (as if!), it would be able to give away shares to its drivers. If they do - it comes out of the pockets of its investors (if it issues new shares - the value of each current share drops) and if I'm not mistaken will incur a payout to IRS.

Anyway, unless Uber gives away a _significant_ part of the company - the average driver won't see much anyway. Say they give US drivers $1B. With over 500K drivers, that's only $2000/driver.


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## rtaatl (Jul 3, 2014)

Funny how we as regular people take on a loan and it's called debt...yet a shoddy company can get "funding" and it's suddenly a "valuation"...lol!


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## John Deer (Feb 12, 2015)

rtaatl said:


> Funny how we as regular people take on a loan and it's called debt...yet a shoddy company can get "funding" and it's suddenly a "valuation"...lol!


Well, Uber has taken both _debt_ and _investment_.
Investment means that you put money in the company and gets a share. If the company raises in value or distributes profits as dividends - you make money. If the company goes belly up... well, that's why it's a _Limited_ liability company.

You could start a business and instead of financing it via a debt, finance it with equity: you can go to your cousin Sal and suggest he put $50K in your business and get 50% of the shares in return. If he agrees, you just gave the business a valuation of $100K, and you and Sal will each have 50% of it. If the business succeeds and generates $100K in profit - you can get those back as dividends. If the business goes belly up... probably better not to invite Sal to Thanks Giving


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## John Deer (Feb 12, 2015)

Uber next?
http://mashable.com/2015/11/10/snapchat-tech-valuations/
*Snapchat's valuation falls by 25%, and more big tech companies will follow*


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## observer (Dec 11, 2014)

John Deer said:


> Uber next?
> http://mashable.com/2015/11/10/snapchat-tech-valuations/
> *Snapchat's valuation falls by 25%, and more big tech companies will follow*


http://mashable.com/2015/11/24/snapchat-uber-humbled/#3Pc8iZ5DQkq1


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## BurgerTiime (Jun 22, 2015)

#impolode!


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## chi1cabby (May 28, 2014)

*Uber, Lyft look to raise $1.5bn combined*
https://www.google.com/url?sa=t&sou...shP0eHsZQNzJQuOLg&sig2=oE9jpHV_-_aQ1OvVDhtYrA

_Ride-hailing rivals Uber and Lyft are racing to raise a combined $1.5bn by the end of the year, as investors become increasingly sceptical of the lofty valuations attached to Silicon Valley tech companies.

Uber is looking to raise $1bn and Lyft is aiming for $500m, as the companies fight to build market share and finance expensive legal and political campaigns to back their business models.

The fundraisings come at a time when it is becoming harder to gauge how investors will react to lossmaking start-ups. Shares in payments company Square traded below the level of its earlier private fundraising on the first day as a public company on Thursday. Meanwhile, fund manager Fidelity marked down the value of its stake in messaging app Snapchat earlier this year.
_
_Uber's initial conversations with investors were based on a valuation of around $70bn. However, that figure has since come down, according to people familiar with the matter. Earlier this year, investors valued Uber at $50bn. Uber declined to comment._
_
Both companies are already among the tech sector's most aggressive fundraisers, with Uber having raised more than $10bn, a record for a US tech start-up.

Lyft is aiming to double its valuation from just six months ago. It is targeting $4bn before they add the new money, up from the $2bn valuation at which it raised money from investors including Alibaba and Carl Icahn, the activist investor, in May.

"The air has gotten pretty thin where these valuations are," said Max Wolff, chief economist at Manhattan Venture Partners, which brokers transactions in private company shares. "Uber is more at risk than Lyft, because Uber is the poster boy for the most aggressive elements of this boom."

Both companies are heavily lossmaking, which is common among start-ups in Silicon Valley, where growth is prized among early stage businesses. Uber has poured billions of dollars into its international operations, as it seeks to gain market share against homegrown rivals such as Ola in India and Didi Kuaidi China.

Lyft, which has raised a total of $1bn, has invested heavily in US marketing as it bids to steal market share from Uber. The company declined to comment on the fundraising but John Zimmer, co-founder and president of Lyft, said: "We are growing faster than Uber in the US."

The company added that it has been catching up to its rival in San Francisco, the home town of both companies, and boasts a 40 per cent market share in the city. Lyft has also partnered with Didi Kuaidi, one of its investors and Uber's main rival in China.

Yet Uber, which has operations in 65 countries, has revenues that are ten times higher than Lyft's, according to people familiar with the matter. It expects net revenues of about $2bn this year, they said.

Lyft said it was taking in $1bn in fares on an annualised basis, from which the company's take would be $200m based on its normal cut._


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## riChElwAy (Jan 13, 2015)

<<_However, that figure has since come down,according to people familiar with the matter._>>

at what point does this insane amount of billion-dollars-at-a-time funding end ? ?


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## riChElwAy (Jan 13, 2015)

Facebook had 11 funding rounds for a grand total of about $2.5 billion raised

Uber is looking at its 14th funding round and $9.2 billion raised

Facebook is profitable 

Uber is deeply in the red by hundreds of $millions


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## cferrel (Dec 14, 2015)

If Uber goes public im buying put contracts.


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## phillipzx3 (May 26, 2015)

I have 5 million in the bank. Could someone please loan me 5 bucks? ;-)


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## KevinH (Jul 13, 2014)

From The Nov 28th issue of The Economist magazine:
" Lyft, a taxi-hailing firm that is a rival of Uber, reportedly suffered losses of nearly $130m in the first half of this year, on less than $50m in revenue."


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