Ridesharing, as a term, encapsulates a host of mobility-centered services that are designed to get you around your city. Collectively, ridesharing companies are among the most successful fundraising entities in the world, which makes them quite fun to watch as a group.

The cohort did not disappoint this week. Instead, it made a host of headlines that we might as well begin to curate into the Ridesharing Money Report, but the world very much doesn’t need yet another newsletter, so this bullet point list will have to suffice.

• Warren Buffett nearly invested in Uber. Buffett nearly invested $3 billion into Uber earlier this year, but it fell through. As , “[Buffett’s company] has a history of investing in troubled companies in exchange for favorable terms.” Yes it does. And thus, in a sense, Buffett indicated that Uber probably hit a local minimum. I wonder at what valuation Warren was considering making the deal.
• Bird might grow a horn. Earlier this week, news broke that Bird may raise $150 million more at a $1 billion valuation. That would make it the first scooter-unicorn. Yes, that was fast. No, the math doesn’t work. Maybe, investors will do well by letting FOMO, in this case, drive their wire transfers.
• Lime is fundraising. Speaking of scooters, Lime is . No word yet on terms, but coverage is still pretty thick, and recurring.
• SoftBank invests in Cruise. And finally, : “General Motors […] said that SoftBank Vision Fund will invest up to $2.25 billion into its Cruise self-driving program, with GM itself investing an additional $1.1 billion.” First, h0t damn. Second, it’s bad for Lyft, which Uber GM has invested in. But Cruise will now share an investor with Uber, which, in case you haven’t heard, competes with Lyft.

Someone is going to make short-range mobility work at a profit. I don’t know who, or what model or mode of transit, but someone will. And that’s good for us, the transit-takers. How many billions will get blended in the process, however, is a number that seems to go up every month.

From The :

SoftBank is making a bit bet on autonomous cars. The firm’s Vision Fund will invest $2.25 billion in General Motors’ self-driving car unit, . GM will also put $1.1 billion more into Cruise after the deal closes.

Meeker publishes annual report

Famed tech analyst Mary Meeker released a pared down but still massive annual Internet Trends  showing, among other things, that the average adult spends nearly 6 hours a day on digital media.

Nexus targets $450M for new fund

, a VC firm that backs founders in India and the U.S., is seeking $450 million for a new fund, according to a securities filing.

Klaxoon secures $50M for meetings

Virtual meeting startup  has raised $50 million in a Series B round led by Idinvest Partners.

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With for the end of the year, and a rumored billion dollar deal in the works, ofo, Mobike and their competitors leaped into quarter four with high hopes.

But the numbers and events of the last three months show that dockless bike-sharing industry players and their backers might be in need of a reality check.

The Numbers

According to Crunchbase data, the beginning of 2017 brought a huge jump in the number of known funding rounds in the dockless bike-sharing space.

The number of known funds raised increased significantly from 2016 to the early months of 2017, jumping from around $174 million to $735 million. The second quarter included a notable $600 million led by for Mobike. Quarter three saw a huge 700 million dollar for Mobike’s main -backed competitor, ofo. (Mobike did not provide comment by the time of publication.)

This fundraising momentum did not carry into the fourth quarter for ofo and Mobike. The space did not see the $1 billion dollar fundraising round led by Japan’s Softbank Group, nor did join in this effort.

The fourth quarter saw a slight decrease in total known funding amounts from the previous year. It consisted of a funding round in December for the U.S.-based dockless company, Limebike, and a private equity round of an undisclosed amount for Mobike. The majority of the known almost $553 million raised in the quarter, however, came from two funding events for .

Ant Financial-backed acquired Hellobike . Youon Bike is a Jiangsu-based bike sharing platform, but unlike its newly acquired subsidiary its users picked up and parked their bikes at docking stations. In early December Alibaba-subsidiary, , led a funding round that brought in $350 million for Hellobike. Later in the month, Shanghai-based led a round that raised nearly $153 million to round out the year for the company.

These massive funding rounds point to the willingness for Chinese investors, like Alibaba and Tencent, to direct money into this space to increase market control. Tencent-backed Mobike and Alibaba-backed ofo already constitute a 95 percent of the Chinese dockless bike-sharing market. As recent events point out, surviving in the competition against Mobike and ofo without a deep-pocketed group as support has proven to be a big challenge for smaller dockless startups entering the space in China.

What Happened To Bluegogo?

In July, we discussed Bluegogo’s struggle to attract big investors. Following our report, the company continued to face problems with fundraising in the third quarter and ended up ceasing operations in November while other small dockless bike-sharing startups, like , .

Because of the nature of both the dockless sharing platform and competition, companies in the space require extensive capital to function and, especially, keep up with industry heavyweights. Unlike traditional ridesharing platforms, like or , for example, riders do not make use of their own or other individuals’ machines. Instead, the company must bear the costs of manufacturing and servicing bikes themselves. In an industry where expansion combined with low costs for participation is the primary means of gaining users, and dominating the market the only goal, endless monetary support is key.

So what happened when companies like Bluegogo and Mingbike came into the fold and adopted the same strategy (minus a bag full of money)? They crashed.

As it turns out, as the company’s leaders realized that they had set out with a, frankly, poorly thought out business plan, they scrambled to bring in more funds to cover costs, in the process. When customers started asking for their deposits back, that’s when people started disappearing. According to the , the founder of Bluegogo, Li Gang, fled to an “unspecified country” after facing liquidity problems and complaints from users.

Despite this failure, there are rumors of hope for Bluegogo. The rideshare company, Didi Chuxing, is looking to acquire Bluegogo this year, which would effectively bring it back into the fold and possibly give ofo and Mobike a run for their money. (Bluegogo and Didi did not provide comment by the time of publication.)

Even so, mounting regulatory concerns in China could hinder this competitive effort and the growth of the dockless bike-sharing market altogether.

Regulation To Halt Growth?

When Uber and Didi started offering their ride-sharing platforms in China, they immediately faced legal . Their platforms disrupted the local taxi service industries which prompted taxi drivers to .

During their establishment in China, however, dockless bike sharing platforms did not face a similar backlash. Instead, the platforms offered the potential to assist in providing more environmentally friendly and convenient services to civilians who required only short distance rides home or to public transportation stations. However, of bicycle graveyards have since appeared in urban areas, giving rise to complaints of congestion and misuse. The annoyances of the dockless bike-sharing platform have started to outweigh its benefits for the Chinese government.

According to , the national-level Ministry of Transportation issued general guidelines and suggestions for bicycle sharing companies to curb problems for congestion, misuse of deposit funds, and unsafe use of bicycles. These suggestions include an , electric parking fences, and restrictions on deposit collection. Later in August, the People’s Daily, the Chinese Communist Party-sponsored media, released an berating the bike sharing industry and instructing companies to heed the demands and needs of its users.

Local Chinese governments have already begun instituting tighter regulations. The Shanghai transportation bureau has bike sharing companies to halt the addition of new bikes into the city, as well as the relocation and collection of bikes that were misused or improperly parked. have emerged in Nanjing and Guangzhou and in other cities, where governments have also called for real-name user registration as well as further integration with the local transportation authorities.

Ofo has begun to by increasing the number of bicycle relocation service trucks in circulation, as well as instituting a blacklist for customers who misuse or carelessly park bicycles. A spokesperson for the company stated that it “supports smart regulations that protect public safety and promote innovation and consumer choice, while not being overly onerous for this new and quickly growing industry.” However, the caps on bicycles by local governments and other regulations point to a potential for a shift in focus away from unending expansion. As ofo and Mobike expand globally, the lessons learned could inform their strategy for entering the U.S. market.

Looking At China, U.S. Governments Are Wary Of Consequences

U.S.-based bikeshare companies Spin and Limebike are taking on the China-based ofo and Mobike domestically, but regulations will likely not allow the uninhibited explosion of bicycles on city streets like in China.

Spin canceled their opening in Queens after receiving a cease and desist letter prior to the event. Similarly, Limebike is in Dallas, after citizens have started to complain about bikes strewn carelessly on sidewalks and in other public areas. Ofo already at the University of California at San Diego in April, after the university kicked the company off campus following an unapproved trial run that resulted in haphazardly parked bikes and campus confusion. Spin replied to a Crunchbase News inquiry confirming that after the ofo situation at UCSD “Spin is now operating an stationless bikeshare program on the campus.” (Limebike did not provide comment by the time of publication.)

If expansion is not the name of the market grabbing game in the U.S., we may see companies increasingly partnering with local governments and influencers to take over this part of the western sphere. Huge investments and uninhibited spending might not be the winning ticket for ofo and Mobike. We may begin to see other factors like play more of a factor in the sphere. Furthermore, players like Limebike and Spin might have a competitive home-field advantage that smaller players in China did not.

Update: After publication, ofo got back to us saying that the company is “always working to enhance the customer experience and offer the best possible service,” and that it intends to collaborate with local governments and focus on rapid expansion in the U.S. this year and expects profitability to grow.

Top Image Credit: .

In August, we wondered aloud at the “The Staggeringly Large Global Bet On Ridesharing” which, at that moment, was potentially growing by over $1 billion. We repeat the comment today as we have news of even more capital piling into the ridesharing market, this time into Lyft’s pockets.

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Yes, the $500 million more that Lyft was expected to raise, has been raised. The firm was proudly :

Today, we’re announcing that our most recent  of funding has been increased from $1 billion of new capital to $1.5 billion. This financing, led by CapitalG, will bring Lyft’s post-money valuation to $11.5 billion.

The backdrop to the Lyft Series Whatever extension is, of course, the Softbank-Uber deal that is currently underway—but not done for certain. It would be a material reversal of events if Lyft closed its new funds, as it has, and Uber’s deal fell apart. That would leave Uber without new capital, cashed-out employees and early investors, and more. Lyft, in contrast, has already shifted into gear.

But instead of bogging down in the Uber story, let’s remind ourselves about Lyft’s financials. Earlier this quarter, , providing us with a clearer picture of where Lyft is today. From our piece:

But before we talk about now and tomorrow, Bergen and Newcomer report that Lyft lost $606 million against $708 million in net revenue in 2016. Net revenue represents the company’s cut of fares, making it far smaller than the firm’s gross merchandise volume (or ridesharing equivalent metric).

From there, we turn to 2017. According to the duo, Lyft will bring in around $1.5 billion in net revenue this year, a more-than-doubling of its prior-year result. The firm was tipped to reduce its pace of losses on a dollar basis in 2017, but that appears to be no longer the case. Instead of lowering its (presumably adjusted) losses to $400 million, Lyft’s investors “are now predicting losses of close to $600 million in 2017, two people” told Bloomberg.

That $500 million more that Lyft just raised is therefore material against its pace of loss. (Uber’s loss rate is higher, meaning that it gets fewer miles to the billion.) With the full, new $1.5 billion, Lyft has quite a lot of runway to drive down before it needs to tap the brakes.

That’s all the stuff that matters today. But behind the scenes, the self-driving race is afoot. Whomever is the first across that particular finish line will have the chance to shake up the then-extant ridesharing market. All we’ve learned today is that Lyft’s chances of being a contender for that particular pole position went up.

(Oh and one more thing. Guess ?)

From The :

Is a SaaS crash coming?

• A cursory glance at tech headlines may have you believe that the software-as-a-service (SaaS) business is humming along nicely. And for the most part, it is. However, some see trouble afoot for the market’s younger companies, with declining investment at the earliest stages. Similar issues may be plaguing mobile app startups as well, a Crunchbase News analysis finds.

• Intuit is acquiring , a provider of time-tracking tools for employees, for $340 million in cash, with plans to incorporate the app into the QuickBooks platform. Eagle, Idaho-based TSheets, founded in 2006, previously raised $15 million in growth funding, after operating for nearly a decade without outside investment.

•  has raised an additional $500 million for its latest funding round, bringing the total to $1.5 billion. The round, which now includes backing from Fidelity and the Ontario Teachers’ Pension Plan, sets a post-money valuation of $11.5 billion for the ride-hailing company.

• Los Angeles-based seed investor  has raised $125 million for a fourth fund that will focus on startups in the region.

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The ridesharing wars are showing few signs of slowing down as car makers and technology conglomerates continue to pour money into the space. All are hoping to ensure that they are not left out of whatever becomes the future of transportation.

That big tech shops like Alphabet and Apple care about cars at all might feel odd, but bearing in mind the average technology giant now goes in today’s market to maintain its competitive position, the move isn’t as odd it might seem. Tech companies are pushing their own in-car phone and computer technologies, further justifying their interest in the space.

But mere intellectual consistency doesn’t erase all the ironies. The mega-corps that often fund ridesharing companies also provide a goodly chunk of the supply, with their workforces using the services to get to work. And as every major ridesharing company loses money, the big tech companies paying for their growth are effectively subsidizing their own employees to an extent.

With that, let’s untangle the myriad of ties between major tech corporations and the ridesharing companies they subsidize.

Google-Uber v. Alphabet-Lyft viz Waymo v. Uber

We’ve written extensively on Crunchbase News about the between the ridesharing companies of the world.

For instance, Apple has , the Chinese ridesharing player. Didi itself has  after the American company folded its Chinese operations into Didi in exchange for an equity stake of the combined entity. Meanwhile, Didi has , Uber’s chief rival in the United States. Lyft is now reportedly .

So where does that put Uber? In its corner was Google (now part of the holding company Alphabet), which into Uber at a $3.5 billion valuation several years ago. But that relationship has famously soured, with Alphabet-subsidiary Waymo in a very public manner. And, of course, Alphabet is now threatening to it spent on its Uber bet into Lyft.

That would put Apple and Alphabet on the same side of the United States ridesharing war. That said,  Apple still owns part of Uber through its Didi stake, and presumably Google (an Alphabet company, like Waymo) still retains at least some of its Uber stake. So if the Alphabet wager comes into play, then both Apple and Alphabet could both be on both sides of the United States ridesharing war at the same time.

Makes perfect sense.

But before we close the book on this silly damn space for the day, we need to phone a friend.

Enter Softbank

Softbank, which is in the middle of one of the most expensive gambling runs in the history of our species, has its sights trained on Uber equity. Maybe.

���澱�Dz�’���� had some good words on the potential deal this morning. Take care to note who comes up at the end:

Lyft! Who would have thought that the perennial number-two player in the United States would become the repository for anti-Uber bets by people that are either cross with Uber (Alphabet via Waymo) or bargain-hunting (Softbank via Saudi Arabia’s money).

All this sums to the fact that there is too much capital seeking return and too few good ideas—at least in proportion. Add in the fact that major tech companies are terrified at being disrupted from the outside, the sums of money available, both intelligent and dumb, is astounding.

Small question: What happens to the torrent of cash needed to keep the global ridesharing market afloat if there is a correction? How many companies could die, how many billions of dollars of value could disappear, and how quickly?

iStockPhoto / Antagain

Seemingly days after our own Jason Rowley did yeoman’s work graphing the incestuous ties between the various ridesharing companies of the world, and about a month after these pages wondered if the world had lost its mind after totting up the huge sums deployed into the market niche, more dollars are raining from the sky onto the yet-nascent and still-quite-unprofitable industry.

How many billions does it take to make ridesharing work? The answer, as always, is more.

Today is no exception to that answer. To wit, here’s the $1.2 billion round that Go-Jek is close to closing. I’ve quoted at length here for a reason, so excuse the wall of text:

JD.com, the China-based e-commerce firm that rivals Alibaba, has agreed to join Go-Jek’s upcoming $1.2 billion round, a source with knowledge of discussions told TechCrunch. The news was .

We reported on the upcoming round, which would value Go-Jek at $3 billion post-money, in May . It looks like it has taken slightly longer to pull things together than was anticipated at the time, but the addition of JD.com — a long-term Tencent partner, which is reportedly putting $100 million in — it is close to being finalized.

There’s a lot in that TechCrunch passage. Let’s go in order:

• JD.com, the noted Alibaba rival, are both investors in the odd government-forced China Unicom deal that brings private money into stumbling state-owned goliaths.
• Go-Jek needs $1.2 billion more. According , the firm has already raised $1.75 billion. That makes this round a big deal when stacked next to the firm’s prior capital injections.
• Tencent is in the deal, because why not! Bear in mind that the biggest Asian tech players have been hyperactive in the investing space in the current cycle. Not that that is bad or odd — after all Alphabet has three venture arms, Microsoft finally decided to use its checkbook, and even smaller giants like Salesforce are active.

The sum, if closed, will bring Go-Jek to about $3 billion in invested capital. That number should blow your damn mind. It doesn’t because Softbank is out there partying like 22 year old me in Vegas, but that doesn’t meant that any of this is normal.

As we wrote in July:

[S]o much money is flowing into the ridesharing niche that we’ve become inured to it. We have stopped asking enough questions about the industry itself.

Bring on the correction.

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WeWork raises $4.4 billion

• Co-working space juggernaut  just raised $4.4 billion in new investment from the SoftBank Vision Fund, which has been on an unprecedented funding spree in recent months. Out of the total investment, $3 billion will go to buying new and existing shares in the company, while $1.4 billion will go to three newly created companies managed by local WeWork teams in China, Japan, Korea and Southeast Asia.

Amazon finalizes Whole Foods purchase

• If you’re looking for a deal on an avocado, just wait till Monday. That’s when Amazon says it will  of Whole Foods, accompanied by price cuts on a number of best-selling items. Over time, Amazon says it plans to integrate its Prime program with Whole Foods, extending savings and in-store benefits to members.

VC doors open for real estate deals

• Home is where the funding is. Seed and early-stage investment in U.S. real estate startups rose sharply in recent quarters, even as overall activity at those stages declined, a Crunchbase News analysis finds. Investors say it’s a signal that the massive industry, long a tech laggard, is starting to catch up.
• For more stories, follow  on Twitter and check us out on .

iStockPhoto / Leonardo Patrizi

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Here, we’re going to specifically focus on investment activity and the structure of its investment network in the ridesharing industry. This serves both to quantify the margin by which Uber currently leads, as well as to identify the growing network of alliances by a potential usurper.

Charting the Ridesharing Boom

Ridesharing is one of the fastest-growing segments in the transportation market. According to , the number of users of ridesharing services will cross the half-billion mark in 2020.

Statista further estimates that by 2020, global revenue of the ridesharing industry will be approximately $61.4 billion (USD) from 12% of the adult population in the various regions Statista’s analysis covers. This points to a strong but linear growth trajectory for the industry at a global scale. However, continued growth won’t come cheap.

Sustaining growth in the ridesharing industry – especially given fierce competition in most markets from other ridesharing services, taxi companies, and public transit – is a very capital-intensive endeavor.

Using data for over 260 funding rounds of all types invested into some seventy domestic and international ride-sharing companies in Crunchbase’s ridesharing category, we can see in the chart below just how much has been invested over the past couple of years

Be advised that for years prior to 2013, there were still deals with known dollar amounts, but those were too small to properly show given the scale of dollar volume from subsequent years.

The scaling problem presented by global ride-sharing investment data points to the massive, nearly unparallelled increase in funding into that industry, one that less than a decade ago was little more than a twinkle in entrepreneurs’ eyes.

Just How Tangled Is The Ridesharing Market?

In the last 18 months or so, there’ve been a number of deals that, to an outsider, might make the ridesharing industry look like a jumbled mess of entangled alliances.

For example, Google’s parent company, Alphabet, has an autonomous car subsidiary called Waymo, and Waze, a mapping application owned by Google, began rolling out a carpooling service this year. This is all despite the fact that Google, by way of its venture arm, , into round in August 2013.

And let’s not forget that Apple, which is , led into Chinese ride-hailing giant Didi Chuxing in June 2016. Alibaba, Tencent, and SoftBank also participated in that round, which is no coincidence considering that each have their own ambitions in the automotive industry. Two months later, in August 2016, Didi completed a of Uber China, which capitulated after a years’ long battle against Didi for a share of the Chinese market.

Finally, traditional automakers have also gotten into the ridesharing mix. , a private urban mass-transit company, in September 2016, or the fact that General Motors led in late December 2015, a deal which also saw participation from Alibaba and Didi Chuxing.

It’s enough to make one’s head spin. And given the litany of interconnected deals and dealmakers referenced above, the belief that the network of ridesharing investors is a hopelessly tangled mishmash of incumbents and competing interests may seem like a sound one.

But is it though? Not really.

Using investment round data from Crunchbase, we were able to map the network of investors in different ridesharing companies using , an open source network analysis and visualization package.

The network visualization above contains three sets of nodes (i.e. the circles):

1. The dark blue nodes represent investors.
2. The lighter blue nodes represent companies.
3. And one blue-grey node represents Didi Chuxing, which is both a company and a strategic investor.

The size of company nodes is determined by their “indegree,” a statistic derived from that counts the number of inbound connections to that node. The more inbound connections (in this case, the more investors) the bigger the indegree score and, thus, the node in this visualization. Companies like Uber and Lyft have comparatively large numbers of investors, which is why their nodes are bigger on the graph.

The connections above are weighted by the number of rounds an investor has participated in with the company. Particularly loyal investors (those that have followed-on in multiple rounds after their initial investment) are closer to their portfolio companies’ nodes than those with comparatively few interactions.

Although aesthetically pleasing, the graph above doesn’t tell us a whole lot about the network of investment though. In order to do that, we’ve highlighted and labeled some of the ridesharing companies with their brand colors, and diffused the highlighting to their nearest neighbors on the graph (which, typically, is just their investors). Where those colors begin to blend, we can see where investors overlap with one another.

We can now see that investors in the global ridesharing industry are surprisingly cleanly divided. Most investors only have one ridesharing company in their portfolio, with only a few exceptions. Some highlights of those exceptions:

• Kapor Capital is as investing in Uber and Via.
• Coatue Management in Grab, Didi Chuxing, Careem, and Lyft.
• , an investment group out of California, is the only investor in this data to have both Uber and Lyft in its portfolio.

Tracing The Tentacles of Didi Chuxing

There are plenty of companies in the middle of the circle that have small investor networks, but for the most part, Uber is on one side, and the likes of Didi, Lyft, and others are on the other.

Why is that?

Like we mentioned earlier, Didi Chuxing holds a somewhat unique position in this network, as it is both a company that has received outside investment and a strategic investor.

This version of the network visualization highlights Didi Chuxing and some of the ridesharing companies it has invested in.

Apart from being a dominant player in its home country of China, Didi has been making strategic investments in ridesharing companies around the world. Here are a selection of its deals:

• Didi in Careem, a leading ridesharing service in the Middle East.
• Didi’s aforementioned investment in Lyft gives it exposure to an estimated , according to recent market analysis by .
• Didi’s participation in gives it a stake in India.
• Didi and SoftBank’s give both groups exposure to the rapidly-growing Southeast Asian market.
• Its gives Didi exposure to Eastern Europe and Africa.
• Didi’s leadership in 99’s $100 million Series C round (not pictured above) gives it a foothold in South and Central America.
• Didi at a $68 billion valuation as part of the Uber China merger in August 2016. That merger left Uber with a 20% stake in Didi at the time, then making it the largest single shareholder in Didi.

This investment strategy is, presumably, an effort to counter Uber’s global expansion. If this is the case, this strategy is an interesting exercise in investment ju jitsu. Rather than plowing considerable resources into developing ground operations in far-flung outposts around the world, like Uber has, Didi has instead bought up stakes in regionally-dominant companies.

This “buy” rather than “build” approach to expanding its international reach places Didi in a somewhat unique position in the global ridesharing market. And this approach seems to be working, at least for now.

Just today, we learned that Didi is in the running to buy up even more of its chief rival. New York Times reporter Mike Isaac that Didi has joined SoftBank and other investors in a syndicate to purchase more shares of Uber, and this development has also been covered by The Information.

The question is, which strategy will prevail? Although Uber has a decent war chest to continue to build its operations in its many international markets, Didi is better capitalized, and has an alliance with SoftBank, the deepest pocket in VC, PE and buyouts today. As of right now, Didi is the most-funded company in the ridesharing space, with almost $4 billion more cash raised than Uber, to say nothing of debt and credit facilities. For Didi, buying its way to global domination of the ridesharing industry is a viable strategy.

With its reach expanding in scope and depth outside of China, Didi may be the ridesharing company to watch—Uber be damned.