Shares of Serve Robotics (SERV -12.48%) skyrocketed 55.2% in December, according to data provided by S&P Global Market Intelligence. As 2024 drew to a close, investors seemed to be increasingly hungry for investments on the more speculative side of the spectrum, and Serve certainly fits that description.

Granted, if investors are going to make a more speculative investment, they could do far worse than Serve. The robotics company does have this going for it: Its two largest investors are Nvidia and Uber Technologies, two of the biggest companies in the world. Having this pair on its side paints a hopeful picture for Serve investors.

I say that Serve is speculative because it's generated less than $2 million in trailing-12-month revenue and has a net loss of $33 million during that time. This makes funding paramount to the company's ability to achieve its long-term vision.

Within this context, there is reason for investors to be optimistic about Serve stock as things get going in 2025. On Jan. 6, the company announced that it had raised $86 million in December, bringing its 2024 total to $167 million. And on Jan. 7, it announced plans to raise another $80 million.

Where Serve is getting fresh funds

Serve is raising money by selling stock. As of June 30, the company had 36.5 million shares outstanding. At the end of 2024, just six months later, it had 51.5 million shares outstanding. And with its latest $80 million announcement, it intends to sell 4.2 million more shares. Adding it all up, that's a 53% increase to the share count in less than one year, which dilutes shareholders.

Put another way, let's suppose that a shareholder owned 10% of Serve Robotics back in June. That would mean that they owned almost 3.7 million shares. Now that same shareholder only owns less than 7% of the company because there are so many more shares.

Why Serve needs to do this

Serve Robotics' robots provide last-mile delivery services, which may be particularly useful to the restaurant space. At the end of the third quarter of 2024, the company had just 59 daily active robots on the streets. But it has a deal for 2,000 robots with Uber, and it aims to have 2,000 deployed by the end of this year.

Considering this is the primary business, Serve's shareholders should want to see a rapid increase in the rollout of its robots. But there's a real cost to doing this. And considering it's a small company with meager income, it needs cash.

To be clear, I consider Serve Robotics a more speculative investment because of how early it is in its journey. That said, it can be OK to have a speculative position, as long as investors understand the risks and have patience. For patient investors, December was positive for Serve. Its higher stock price allowed it to raise more money -- which it needs to accelerate growth in 2025.