Uber All Set To Pick Up New VC Money
Uber, formerly known as Uber Cab, a San Francisco based company backed by StumbleUpon co-founder Garrett Camp and Red Swoosh founder Travis Kalanick is close to raising a substantial new funding in a round led by Benchmark Capital.
Context & Ripple Effects
Uber, which dropped 'Cab' from its name on the way to this moment, has until now been a founder-funded project: Garrett Camp, who took StumbleUpon back to independence in April 2009 after two years inside eBay, and Travis Kalanick, founder of Red Swoosh, put up the early money themselves. A round led by Benchmark Capital — reported as close but not yet signed — would be the company's first institutional capital.
The firm matters here because of how it invests: Benchmark has a record of concentrating early bets outright, as when it took Engine Yard's entire $3.5 million series A alone in January 2008. A lead check from that kind of shop, rather than another angel extension, is what changes Uber's category from side project to scaled company.
First-order effects
- Uber gains access to institutional-scale capital for the first time, replacing reliance on Camp's and Kalanick's own money and giving it runway to push past its San Francisco base.
- The rename from Uber Cab ahead of the raise positions the company as broader than a taxi service precisely while it courts a tier-one investor whose brand becomes part of the pitch.
Second-order effects
- Once Benchmark's terms surface, they become the price anchor any other fund negotiating with Uber must beat — shifting leverage from founder angels toward whichever firm leads the round.
- For Camp personally, a funded Uber adds a second active vehicle alongside StumbleUpon for deploying founder-turned-investor capital, tightening his network position between the two companies.
Third-order effects
- If the pattern holds, a handful of tier-one firms like Benchmark function as gatekeepers whose willingness to lead converts founder-financed experiments into institutionally scaled companies — concentrating early-stage power further at the very top of the venture market.
The trend: Early-stage venture capital is consolidating around a small set of tier-one firms whose lead checks, more than the founders' own money, determine which consumer startups scale.