With ridesharing giant Uber mired in controversy, two of its competitors are eyeing fresh funding.
Lyft, Uber’s main rival in the US, is targeting a $500 million fundraise at a $6 billion valuation, according to The Wall Street Journal. And Chinese ridehailing company UCAR is reportedly looking to close out its latest funding round with more than $1 billion in commitments.
Lyft, which has long driven around in Uber’s shadow, would reportedly be valued at $6 billion with the fresh financing, representing a small bump up from the $5.5 billion valuation garnered a little more than a year ago with a $1 billion round, half of which came from General Motors. But that figure still pales in comparison to Uber’s eye-popping $68 billion valuation.
Several months after Lyft’s $1 billion round, in June the company reportedly hired investment bank Qatalyst Partners to contact automakers and other possible buyers about an acquisition. But a sale never came to fruition. In the meantime, Lyft has experienced growth in several key metrics. In early January, a report from The Information revealed that Lyft expects to be profitable by 2018, which would be good news for the company for a few reasons: First, it would no longer be losing hundreds of millions each year, and second, Lyft would pull away from Uber in the two companies’ race to profitability.
Across the Pacific, Uber ended its intense battle for the Chinese market last August, when competitor Didi Chuxing bought Uber’s China business. As part of the deal, Uber and its Chinese investors received a 20% combined stake in Didi, and Didi invested $1 billion in Uber. But with news of UCAR’s enormous new financing, it appears the Didi-Uber alliance doesn’t have the Chinese market locked down.
UCAR—which differs from Didi, Uber and Lyft by allowing users to order rides via an in-house fleet of cars and licensed drivers, rather than relying on citizen contractors—has reportedly already raised more than $670 million toward its new round and will secure over $300 million more before closing the fundraising. The company went public on China’s National Equities Exchange and Quotations (NEEQ) last July after raising more than $1 billion in private funding from investors including Warburg Pincus and Legend Capital.
Considering Uber’s recent (and ongoing) PR nightmare, it might be a good time for the company’s ridehailing rivals to raise money. The hits to Uber’s public image began with the viral #DeleteUber campaign and continued into more serious territory, with accusations of sexual harassment from a former engineer and the resignation of SVP of engineering Amit Singhal after Uber was alerted to sexual harassment claims made against Singhal during his tenure at Google. Then, a few days ago, a video surfaced of Uber CEO Travis Kalanick arguing with his Uber driver over the company’s pricing policies.
Article by Dana Olsen, PitchBook