Remember "Winter is coming" and "unicorpses"? Homejoy and Spoonrocket may be dead, but rumors of a broader die-off among sharing economy and on-demand startups has proved to be exaggerated.

Yes, last year capital flowing into the (admittedly hazily defined) sector was down 35 percent from 2015 levels, while the number of deals fell 25 percent, from 375 to 282, according to the analysts at CB Insights. But 2017 is looking like a different story. The sector's winning startups are going strong -- strong enough, in fact, that investors want to fork over more cash.

Winners need money to keep winning.

This month Airbnb closed its Series F with almost $450 million, bringing the total round to $1 billion at a $31 billion valuation. Perhaps more impressively, Airbnb is profitable, and rumors are afloat that the company will expand into listing long-term home rentals soon, threatening Craigslist's turf. If the consumerization of IT is echoed by the consumerization of office space, maybe Airbnb will eventually take on WeWork.

Instacart, an on-demand groceries app, just raised $400 million at a $3.4 billion valuation. In an interview with Bloomberg, CEO Apoorva Mehta emphasized that Instacart is spending its money wisely. Mehta said that the company has cut its burn rate in half since last year, and that every Instacart market older than six months is gross-margin profitable. "One of the things we've had as a result of this round is a lot of scrutiny from the smartest investors in the world," Mehta told Bloomberg.

Instacart competitor Postmates, which focuses more on food delivery than groceries, told Forbes that the company is aiming to achieve profitability posthaste. In fall 2016, Postmates raised $140 million at a $600 million valuation, with diversified revenue growth. Aside from customers paying for their food to be delivered, "about 6,000 merchants pay for better placement on the app and to be featured in the Postmates Plus Unlimited program," TechCrunch reported. "Major corporations like Apple and Starbucks have also paid to integrate Postmates' API into their ordering platforms."

Giants can fall if they aren't propped up.

Hemorrhaging money used to be the routine strategy for on-demand service companies or marketplaces. The phrase "unit economics" was the bane of these startups, almost as scary as "generally accepted accounting principles." In one of the most-watched verticals, ridesharing, that's still true enough to provoke concern.

Uber is the most valuable private startup, and it reportedly loses about half a billion per quarter. Competitor Lyft is said to have promised investors that it would fight to keep losses down, but still lost $600 million last year. Now Lyft is reported to be seeking $500 million in new funding, at a $6 or $7 billion valuation, after failing to find a buyer in August 2016.

Who might be willing to keep funding Lyft's fight to catch up with Uber? The venture capital firms most active to date in the sharing/on-demand space include Sequoia Capital, Andreessen Horowitz, and Founders Fund:

  • Sequoia led Airbnb's seed round in 2009 and Instacart's Series A in 2013. The company also has a position in Uber through affiliated angel investor Jason Calacanis, and Sequoia partner Alfred Lin supposedly invested as an individual in 2011.
  • Andreessen Horowitz led Airbnb's Series B in 2011, Lyft's Series C in 2013, and Instacart's Series B in 2014.
  • Founders Fund led Airbnb's Series C in 2013, Lyft's Series B in 2013, and Postmates' Series A in 2013 as well as its Series D in 2016.

Andreessen Horowitz and Sequoia Capital both participated in Airbnb and Instacart's most recent rounds. Inc. asked Sequoia's Alfred Lin whether the firm is considering investing in Lyft, and Lin declined to comment.

Although Airbnb and Instacart's successful fundraising efforts show that capital is still available for growing sharing economy and on-demand startups, Lyft may have more of a struggle. Uber's recent vicissitudes haven't knocked it out of first place. Independent analyst Byrne Hobart noted that "even if they lose a chunk of their passengers and drivers today, they still have more scale than Lyft or most of their overseas competitors. As long as most drivers take the Uber ride first and most passengers open the Uber app first, their market position relative to competitors will be stable."

This month, veteran tech journalist Kara Swisher remarked on a podcast, "I think Uber outplayed [Lyft] on lots and lots of things. Just benefiting from Uber's missteps is fine, but they still have to run their business well." Still, Swisher said, "It's not bad, to have a competitor that's literally shooting themselves in every toe possible. I don't think there's any more toes left."