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Article: Of rides & rivals: Travis Kalanick on Uber’s capital strategy, competition with Lyft

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https://economictimes.indiatimes.com/tech/technology/of-rides-rivals-travis-kalanick-on-ubers-capital-strategy-competition-with-lyft/articleshow/129588168.cms

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2026-03-15 10:35

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Over the last decade, few rivalries in Silicon Valley captured investor attention like the battle between Uber and Lyft.
According to Uber cofounder Travis Kalanick, the contest quickly moved beyond riders and drivers and became a fierce competition for venture capital. Speaking on the TBPN podcast on Saturday, Kalanick said the rise of ride-hailing was shaped as much by fundraising strategy as by product innovation.
Describing Uber as more than a ride-hailing platform, he said, âAt Uber we were building the network for the physical world in the form of digitised transportation.â
As Uberâs growth accelerated, investors who had missed the opportunity to back the company began funding its rivals, Kalanick revealed. âUber was doing so well and then all of a sudden a whole bunch of VCs were like, âI want a piece of that and I didnât get Uber, so Iâm funding the competitor.â
Lyft went public about six weeks before Uber, becoming the first major US ride-hailing company to list.
Lyftâs market valuation reached approximately $19.6 billion following its IPO in March 2019, whereas Uber was targeting valuation between $90 billion and $100 billion that April. This was expected to be the largest IPO since Alibaba Group Holding went public in 2014.
Uber shares listed at $45 per, versus Lyftâs $72.
Capital strategy
During Kalanickâs tenure, âCapital became a strategic weapon,â he said. âWhich means you must be the best at getting capital in order to win.â
That philosophy helped drive Uberâs massive late-stage funding rounds. By 2016, the company had reached a private valuation of $68 billion, making it the worldâs most valuable startup less than seven years after its founding in 2009.
To manage intense investor demand, Uber turned fundraising into a system. In its New York office, the company once ran four parallel investor rooms for an entire week, Kalanick said.
Each room catered to a different class of investor, from institutions writing cheques of $250 million or more, to smaller allocations of about $25 million, handled by more junior team members.
âWe were oversubscribed. So we started putting multiple investors in the same room. We were just out of slots.â
Uber even experimented with an IPO-style book-building process for private fundraising. Interested investors submitted how much they wanted to invest and at what valuation, allowing Uber to aggregate demand and set pricing internally.
âIt was like an IPO book,â Kalanick said, âbut done way better because you donât have the bankers.â
He added that Uber was not alone in pushing private markets to new extremes. Founders such as Drew Houston of Dropbox and Brian Chesky of Airbnb were also redefining how late-stage startups raised capital.
CloudKitchens to atoms
After leaving Uber, Kalanick turned his focus to food delivery infrastructure. In 2018, he launched CloudKitchens, initially under the parent company City Storage Systems, with the goal of building real estate and technology infrastructure for delivery-only restaurants, often referred to as âghost kitchensâ.
On Friday, Kalanick announced Atoms, a new venture that absorbs CloudKitchens and expands into additional business lines, including robotics and automation. The firmâs core premise is delivering prepared meals so efficiently that their cost approaches that of grocery shopping.
Under the new structure, Atoms will focus on specialised industrial robotics rather than general-purpose humanoid robots.
âWeâve been quiet for eight years with thousands of employees who couldnât even list us on LinkedIn,â Kalanick said, referring to the companyâs secretive operations.
Microsoft participated in an $850 million funding round for CloudKitchens that closed in November 2021.
Following the investment, the company expanded rapidly across the United States, Latin America, the UK, and the Middle East, employing more than 4,000 people globally.
However, the Financial Times reported that the company faced internal cultural challenges and relatively high employee attrition following issues reminiscent of those previously reported at Uber during Kalanickâs tenure.
Also Read: Uber founder Kalanickâs KitchenPlus has made a tepid start. How long can its âcloudyâ future simmer?
Dara Khosrowshahi
Uberâs trajectory changed when Kalanick resigned as CEO following a series of corporate governance and workplace culture controversies.
He was succeeded by Dara Khosrowshahi, the former chief executive of Expedia Group, who took charge of Uber Technologies in August 2017.
Despite the leadership change, Khosrowshahi in an interview with ET in 2024, acknowledged the foundation laid by Kalanick, and said he was âthe right person for Uber in its founding,â noting that the companyâs core service, customer proposition, and driver economics were already strong when he took over.
âThe core and the bones of Uber that he built were incredibly strong,â Khosrowshahi said, describing their leadership as a âtag teamâ across different phases of the companyâs growth.
According to Uber cofounder Travis Kalanick, the contest quickly moved beyond riders and drivers and became a fierce competition for venture capital. Speaking on the TBPN podcast on Saturday, Kalanick said the rise of ride-hailing was shaped as much by fundraising strategy as by product innovation.
Describing Uber as more than a ride-hailing platform, he said, âAt Uber we were building the network for the physical world in the form of digitised transportation.â
As Uberâs growth accelerated, investors who had missed the opportunity to back the company began funding its rivals, Kalanick revealed. âUber was doing so well and then all of a sudden a whole bunch of VCs were like, âI want a piece of that and I didnât get Uber, so Iâm funding the competitor.â
Lyft went public about six weeks before Uber, becoming the first major US ride-hailing company to list.
Lyftâs market valuation reached approximately $19.6 billion following its IPO in March 2019, whereas Uber was targeting valuation between $90 billion and $100 billion that April. This was expected to be the largest IPO since Alibaba Group Holding went public in 2014.
Uber shares listed at $45 per, versus Lyftâs $72.
Capital strategy
During Kalanickâs tenure, âCapital became a strategic weapon,â he said. âWhich means you must be the best at getting capital in order to win.â
That philosophy helped drive Uberâs massive late-stage funding rounds. By 2016, the company had reached a private valuation of $68 billion, making it the worldâs most valuable startup less than seven years after its founding in 2009.
To manage intense investor demand, Uber turned fundraising into a system. In its New York office, the company once ran four parallel investor rooms for an entire week, Kalanick said.
Each room catered to a different class of investor, from institutions writing cheques of $250 million or more, to smaller allocations of about $25 million, handled by more junior team members.
âWe were oversubscribed. So we started putting multiple investors in the same room. We were just out of slots.â
Uber even experimented with an IPO-style book-building process for private fundraising. Interested investors submitted how much they wanted to invest and at what valuation, allowing Uber to aggregate demand and set pricing internally.
âIt was like an IPO book,â Kalanick said, âbut done way better because you donât have the bankers.â
He added that Uber was not alone in pushing private markets to new extremes. Founders such as Drew Houston of Dropbox and Brian Chesky of Airbnb were also redefining how late-stage startups raised capital.
CloudKitchens to atoms
After leaving Uber, Kalanick turned his focus to food delivery infrastructure. In 2018, he launched CloudKitchens, initially under the parent company City Storage Systems, with the goal of building real estate and technology infrastructure for delivery-only restaurants, often referred to as âghost kitchensâ.
On Friday, Kalanick announced Atoms, a new venture that absorbs CloudKitchens and expands into additional business lines, including robotics and automation. The firmâs core premise is delivering prepared meals so efficiently that their cost approaches that of grocery shopping.
Under the new structure, Atoms will focus on specialised industrial robotics rather than general-purpose humanoid robots.
âWeâve been quiet for eight years with thousands of employees who couldnât even list us on LinkedIn,â Kalanick said, referring to the companyâs secretive operations.
Microsoft participated in an $850 million funding round for CloudKitchens that closed in November 2021.
Following the investment, the company expanded rapidly across the United States, Latin America, the UK, and the Middle East, employing more than 4,000 people globally.
However, the Financial Times reported that the company faced internal cultural challenges and relatively high employee attrition following issues reminiscent of those previously reported at Uber during Kalanickâs tenure.
Also Read: Uber founder Kalanickâs KitchenPlus has made a tepid start. How long can its âcloudyâ future simmer?
Dara Khosrowshahi
Uberâs trajectory changed when Kalanick resigned as CEO following a series of corporate governance and workplace culture controversies.
He was succeeded by Dara Khosrowshahi, the former chief executive of Expedia Group, who took charge of Uber Technologies in August 2017.
Despite the leadership change, Khosrowshahi in an interview with ET in 2024, acknowledged the foundation laid by Kalanick, and said he was âthe right person for Uber in its founding,â noting that the companyâs core service, customer proposition, and driver economics were already strong when he took over.
âThe core and the bones of Uber that he built were incredibly strong,â Khosrowshahi said, describing their leadership as a âtag teamâ across different phases of the companyâs growth.