Firefly announced Thursday that it raised a $30 million Series A with a $150 million valuation, per a PitchBook estimate, led by GV, with participation from existing investor NFX. The San Francisco-based company previously raised a $21.5 million seed round with a $53.96 million valuation in December, also per a PitchBook estimate. Thus far, Firefly has been offering its service primarily to Uber and Lyft drivers as a way for them to pull in around $300 per month for the continuous rooftop display of company-curated advertisements.
However, the new funding has enabled Firefly to acquire the digital portion of Strong Outdoor, the company that provides the iconic ads on top of some of New York City's famous yellow taxis. The acquisition is underway and financial details have not been released. Strong Outdoor struck a partnership with the Metropolitan Taxicab Board of Trade in April 2018 to provide digital advertising to at least 3,500 taxi tops, or roughly half of the city's advertising-enabled yellow cab fleet.
A startup offering supplemental income for ridesharing drivers comes at a convenient time. Beyond the May 8 protests, the fact that Uber and Lyft are public companies means that newly released financial data from the two could possibly be used to corroborate long-standing claims of severely slashed pay for drivers, who are classified as independent contractors. Conversely, both companies are more pressured than ever to turn a profit sooner rather than later as Wall Street seeks positive returns.
With both companies largely having grown around the concept of offering rides for noticeably less money than traditional taxis, sharply raising prices in an attempt to turn a profit or resolve driver pay complaints probably would not be well-received. However, the struggle between profitability and driver pay may simply be a transient issue as autonomous vehicle technology matures. Lyft has a declared goal of replacing human drivers with a fully autonomous fleet in 10 years or less, per its S-1, while Uber has declared similar intentions.
Competitors and legitimacyWhile Firefly may be specifically targeting rideshare and taxi drivers, it isn't the only show in town when it comes to monetizing hours behind the wheel. Carvertise and Wrapify both offer vehicle-based advertising in the form of a vinyl-based advertisement placed around all or part of a car. Wrapify was valued at $6.6 million, per a PitchBook estimate, after a $1.6 million Series A in September 2018; Carvertise does not have a known fundraising history, beyond a $175,000 angel investment in 2015.
After reviewing the terms of service agreements for Uber and Lyft, such advertisements do not immediately appear to be prohibited, although they are not outright welcomed, either. Such vagueness allows companies like Firefly to continue to use ridesharing drivers to deliver their advertisements.
Firefly's comparatively smaller footprint as a rectangular rooftop box may be more conducive to being formally tolerated should the ridehailing hammer come crashing down. Carvertise and Wrapify's vinyl decals that are harder to ignore. Vinyls are a benefit to advertisers pursuing viewer attention but at the potential detriment of a passenger's aesthetic experience, which is crucial to drivers striving to exceed Uber and Lyft's 4.6-4.8 star rating requirements.
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