Fred Wilson and Brad Burnham of Union Square Ventures aren’t huge fans of “this for that” startups, but it seems investors generally don’t mind. In fact, the “Uber for X” (or “Airbnb for Y” if you prefer) class of startups are seeing accelerating deal and funding growth (data below).
We’ve used CB Insights venture capital and angel investment data and also leveraged Steve Schlafman of RRE Ventures presentation about on-demand mobile services (ODMS). Schlafman defines ODMS companies as those that “aggregate demand on mobile devices but fulfill that demand through offline services.”
Over the past two years, on demand mobile service (ODMS) startups have raised $874M across 87 deals. ODMS startups raised $500M across 52 deals in the the past four quarters, a 33% increase from $374M in funding and a 49% uptick in deals from 35 over the same time period a year ago. Note: Uber was excluded from the data in an effort to get a look at the broader ODMS or “Uber for X” universe.
Early-Stage dominates deals; Mid-Stage dominates dollars
Early-stage dominated the majority of the deals over the past two years with 73% of all investments. Q1 2014 was the biggest quarter for early-stage ODMS startups with $49.8M in funding across 10 deals.
On a funding basis, Mid-Stage rounds (Series B and C) made up 60% of total funding dollars over the past two years, driven by AirBnB and Lyft both raising $50M+ Series C rounds in October 2012 and May 2013 respectively.
Both of these companies have since joined Uber as well as Eventbrite and HotelTonight as the only companies who have raised Series D+ financings thereby becoming the elder statesmen of sorts of the ODMS category. In April, AirBnB raised a massive $500M round at a $10B valuation while Lyft announced a $250M round from investors Coatue Management, Third Point and Alibaba. The half a billion in the last four quarters doesn’t figure in these mega-financings.
The chart below highlights the distribution of deals by stage over the past two years.
Many ODMS verticals, but Food & Grocery is getting hot
As the universe of ODMS startups continues to grow, the industry verticals they are attacking also are diverse. Upstart companies have surfaced servicing Food & Grocery, Supply Chain & Logistics, Home Services, and various forms of travel. A cross-section of more recent early-stage financings are shown below. Based on these recent financings, it appears VCs have gotten very hungry for food & grocery delivery startups. In fact, venture investors have already poured nearly $486M over the last four quarters into such companies.