What automotive company is more valuable than General Motors (NYSE: GM) or Ford (NYSE: F)?
The answer is Uber, if its rumored $2.1 billion financing is completed at the valuation it's seeking. The company is continuing along its fundraising war path, this time reportedly going after a valuation of... wait for it... $62.5 billion. It has already raised around $7 billion in funding, but the new capital may be needed to support the world domination approach Uber has taken. With humble beginnings as a friendly ridesharing app, the company is quickly expanding its offering, recently launching services like food delivery and package delivery in select markets, while developing its own driverless car system. It is available in 67 countries worldwide and counting, and is the defendant of lawsuits in just about as many.
Ire has been drawn by Uber's tactics of continually undercutting the competition’s prices at a loss, and employing drivers as contractors rather than full-time employees to get around certain benefits. But no matter the intent of its business model, Uber has become a staple on mobile devices. And now, according to a letter to investors from Uber's CEO, the company has turned its sights to China, where it will spend $1 billion to expand throughout the country. Unlike other regions, China has been a place where Uber has struggled for market share, largely due to Didi Kuaidi, Uber’s locally grown rival and the product of a mega-merger between Chinese unicorns Didi Dache and Kuaidi Dache. 3Q estimates put Didi Kuaidi's market share within the country at around 80%. The company raised $3 billion at a $16.5 billion valuation in September.
Uber will also need to use new funding to combat a partnership that has emerged between its four main rivals around the world. Didi Kuaidi has joined forces with Lyft (U.S.), GrabTaxi (Southeast Asia) and Ola (India) to create one secure API that will enable users to use their local apps when traveling to the different markets; this capability will reportedly launch in 1Q 2016. The partnership won't be the first time the companies have worked with each other. Didi Kuaidi has invested in each of the other three companies, participating in rounds during the past year.
Joining together to share technology and customers will help the companies expand without the enormous expenses required to grab significant market share in foreign countries. The four Uber rivals are worth a combined $25.6 billion based on the valuation of their most recent completed rounds, according to PitchBook data. Though that doesn't cover half of what Uber may soon be valued at, together the companies have a fighting chance to legitimately take on Uber around the world.
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