Uber, the ride-sharing service that allows mobile users to connect with a fleet of local drivers, is hoping to raise several hundred million dollars in a new funding round with a valuation of $10 billion. If successful, Uber will tripled its valuation in just nine months: during their last very successful funding round the company raised $258m, with $3 billion valuation.
The next mega-round will help Uber expand and scale its services as it fends off competitors offering a similar service such as Lyft or Hailo. Lyft's "peer-to-peer" ridesharing service has pulled ahead of Uber in total investment money, having recently raised $250m in a round led by Chinese eCommerce giant Alibaba.
In addition to raising capital, Uber has also sought to expand its services. The company has launched “Rush”, a courier service for the delivery of documents in Manhattan--its first really divergent step away from taxi services.
In the five years since its found, Uber has spread to over 100 cities worldwide, doubling its market penetration of just 6 months ago. According to the Financial Times Uber will be do about $1 billion in taxi rides in 2014.
Uber may face challenges on the road to that $10 billion valuation, however, tech stocks have come under increasing scrutiny lately as investors are starting to question if their eleven figure valuations are in line with the actual value they produce. Further, Uber--along with Lyft--faces legal and regulatory challenges worldwide, as traditional taxi services fight to keep them out of the market and local police forces ticket them for violating local ordinances.
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