The unicorn cash wars are (almost) over

[Bloomberg] [Fully Charged]( From [Bloomberg](   [FOLLOW US [Facebook Share]]( [Twitter Share]( [SUBSCRIBE [Subscribe]](  Hi, everyone. It’s [Shira](mailto:sovide@bloomberg.net) As soon as Thursday – maybe by the time you’re reading this newsletter – we’re going to [get the first full look]( at Uber Technologies Inc.’s financial statements as it starts pitching its initial public offering. This a milestone for Uber, and it’s also a moment to reflect on the phenomenon of "unicorns,” the awful but convenient shorthand for tech companies that reach valuations of at least $1 billion while they’re private. There are now more than 340 of these companies, [according to]( CB Insights, compared with the 18 unicorns identified in 2013 by investor Aileen Lee when she [coined]( the term. (Her list had 39 companies, but many of them had already gone public or been acquired. Uber was on Lee’s list even back then.) This herd of unicorns is a result of a decade or more of low U.S. interest rates that pushed investors to hunt for better returns on their money in riskier, high-growth assets including tech startups. Last year was the first time since 2000 that U.S. venture investments in tech startups [topped]( $100 billion. It was the capstone -- so far -- to what has been several years of eyebrow-raising amounts of capital going into these young, private companies.  These flush years for startup financing have resulted in winners and losers being created on the basis of which companies can raise the most money the fastest, not necessarily the ones that create the best product or service. Uber is the [perfect encapsulation]( of this trend. There would be no Uber, or at least not one of this size and breadth, at any other time in history. Money was a big way Uber [differentiated itself]( from Lyft Inc. Its big bank account dictated Uber’s strategy of going global, and splurging into adjacent categories such as restaurant food delivery and freight handling, while Lyft stuck mostly to rides on-demand in North America. That's not to say that Uber's product or its strategy is inferior to Lyft, but the company was able to dream bigger because it had more access to capital. When Uber shares trade on the public market in coming months, the company will be worth at least four times more than its main rival. At some point, availability of cash becomes self-fulfilling. Startups that look like winners get more capital, which ensures they win. Whether that’s good or bad is up for debate. The elite startups of the 2010s including Uber, Didi and SpaceX are bigger, more disruptive and potentially longer-lasting companies because they had almost limitless access to cash to grow. But venture capitalist Keith Rabois -- an early investor in Lyft -- recently [told]( my colleague Emily Chang that a large amount of investment money “usually creates more problems than it solves” for startups. This is not a new idea. There’s a Silicon Valley axiom that the best young companies tend to grow up during recessions, which forces them to spend wisely and make sure they've honed their products. Now that some of the biggest unicorns such as Snap Inc., Lyft and Uber are going public, it may be the beginning of the end of the period in which startups differentiated themselves through fund-raising ability. Not the end end, of course. Electric scooters continue to be a [capital-raising race](. So does restaurant food delivery, in which Uber is playing the role of [market share-grabbing, cash-burning entrant](. One thing that won't change as the elite unicorns go public: They're still wildly unprofitable, and will be for some time. But from now on, they'll have to live without that geyser of investor cash. --[Shira Ovide](  And here’s what you need to know in global technology news: Uber's biggest investor, SoftBank Group Corp., may [never get to fill the board seats]( it bargained for through its $9 billion investment in the ride-hailing giant in late 2017.  Google is taking more steps than ever to [churn advertising revenue]( from Google Maps, which one analyst called the "most under-monetized asset that I cover."  It turns out that other people [are]( listening to what you say to Amazon's Echo speakers and Alexa digital assistant.  Not great IPO preparation for Uber: Lyft shares [slumped again](.  In a [research paper](, three academics found that when on-demand ride services such as Uber enter a city, there is a collective increase in miles driven, traffic congestion and fatal vehicle accidents.   Join Bloomberg's flagship tech event, Sooner Than You Think 2019, on June 11 to 12 in London. Learn and be inspired by the world's most influential tech leaders. View the website [here](, and apply to attend.    You received this message because you are subscribed to the Bloomberg Technology newsletter Fully Charged. You can tell your friends to [sign up here](.  [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022