In constant fundraising Uber hopes to “starve” rivals
Uber has raised $15bn from private investors since it launched as part of a strategy to ward off smaller competitors in the ever-growing market for ride-sharing technology, says Andrew Ross Sorkin of the New York Times. “Uber’s money-grab is seemingly part of an unspoken strategy to mark its territory,” Sorkin writes. “Every time Uber raises another $1bn, venture capital investors and others may find it less attractive to back one of Uber’s many rivals: Didi Chuxing, Lyft, Gett, Halo, Juno”. However, according to Sorkin, this plan has not been particularly successful as yet, given that a long list of rivals has formed globally. Nevertheless, Uber’s master plan could still come to fruition as these rivals will eventually run out of cash in the long-term and venture capitalists will become less inclined to invest in platforms going up against the mighty Uber.

It feels like almost every other week there is a new headline about Uber raising more money. “Uber Closes $1.6 Billion in Financing.’’ “Uber Turns to Saudi Arabia for $3.5 Billion Cash Infusion.’’ Last week, we got this one: “Uber to Raise Up to $2 Billion in Leveraged-Loan Market.’’

If you add up all the money Uber has raised since it started in 2009 — the idea was born when its founders became annoyed that they could not get a cab in Paris — the ride-hailing app company is on its way to amassing a colossal $15 billion. That’s real cash, not some funny-money, paper-based valuation. (That figure is $68 billion.) It has done all this while still managing to remain a private company, and its chief executive, Travis Kalanick, has insisted that a public offering is not coming soon. “I’m going to make sure it happens as late as possible,” he has repeatedly said.

Consider this: When Amazon went public in 1997, it raised $54 million and was valued at $438 million.

So what exactly is Uber doing with all that money? And what does it say about Uber — and the financial markets — that the company has turned most recently to selling the equivalent of junk bonds?