On Demand Startups See Surge in Venture Capital

Toshima-Ku, Japan, May 22, 2015 (Newswire.com) - Anderson, Lloyd, Jones & Associates (ALJA) look to join the ever increasing Funding for on-demand companies which saw a jump of 514% last year to $4.12 billion, and new investments in early 2015 have totaled at least $3.78 billion.

The rush to funding highlights the growing ability of emerging tech companies to raise venture capital at an early stage, without resorting to a more complicated stock offering.

Anderson, Lloyd, Jones & Associates (ALJA) sees the on-demand sector is one of the hottest, led by the ride-hailing service Uber, which according to unconfirmed reports has been in talks to raise an additional $1.5 billion, an amount that could boost its valuation to $50 billion.

Uber has confirmed that it has already raised more than $5.5 billion, according to CB Insights. Others in this segment include ride-sharing rival Lyft which has raised $862 million, lodging service Airbnb ($794 million) and local delivery group Instacart ($275 million).

The on-demand sector also includes Thumbtack, a way to connect consumers and professional contractors such as painters ($148 million) and Handy, which offers services such as house cleaning and furniture assembly ($58 million).

The sector has raised $9.4 billion since 2010, but most of that has come in the past 18 months, according to a research firm.

“In 2010, there were under 20 (venture capital) investors that had done a deal in on-demand mobile services,” the report said.

At the end of April 2015, that figure has risen to 198. Said another way, there are 14 times the number of investors in the on-demand space.

In addition to ride-sharing, a key segment includes startups in local delivery of food and other items, including Postmates, Sprig, Caviar and Doordash and others providing personal services such as errand-runner TaskRabbit and Shyp, which offers on-demand shipping.