Ride-hailing app Lyft has raised $1bn (£760m) from Google's parent company, further complicating the convoluted world of ride-hailing alliances and dealing a blow to rival Uber
21 Oct, 2017TELEGRAPH.CO.UK
Ride-hailing app Lyft has raised $1bn (£760m) from Google's parent company, further complicating the convoluted world of ride-hailing alliances and dealing a blow to rival Uber.
The round was led by CapitalG, the growth investment fund of Alphabet that has also backed large private tech companies such as home-renting platform Airbnb and payments firm Stripe. The latest round, which comes after a $600m investment six months ago, boosts Lyft's valuation to $11bn, up from $7.5bn.
"Ridesharing is still in its early days and we look forward to seeing Lyft continue its impressive growth," said David Lawee, a CapitalG partner who will join the company's board.
Lyft, which runs a distant second to Uber and is only based in the US, has pushed expansion this year. It says it is available in 41 states and completes more than a million rides a day.
Lyft is deepening ties to Alphabet despite its partnership with General Motors, which has invested $500 million. GM president Dan Ammann told Reuters that any further plans to collaborate with Lyft were "not defined at this time."
Lyft and Alphabet already have a relationship through a partnership Lyft struck with Waymo, Alphabet's self-driving car unit, in May. The two companies are collaborating on bringing autonomous vehicle technology to market, but have not provided many details.
The latest investment will not have any bearing on the Waymo partnership, according to Lyft and Alphabet.
Alphabet also has ties to Uber through its second investment arm, GV. GV invested in Uber in 2013, but then Uber began to develop autonomous cars and compete directly with Alphabet.
Last year, Alphabet executive David Drummond stepped down from the Uber board. This year Waymo sued Uber, alleging trade secret theft, in a case that is set to go to trial in December.
"It is another punch by Alphabet at Uber," said Erik Gordon, an entrepreneurship expert at the University of Michigan's Ross School of Business.
GV could have the opportunity to sell at least some of its stake in Uber in a highly anticipated deal between Uber and SoftBank, which may be finalised in the next week. SoftBank wants to buy between $7bn and $10bn in shares from Uber employees and investors.
Lyft is close to hiring an initial public offering advisory firm, the first concrete step by the company to become publicly listed.
This funding round may delay those IPO plans, however, as the capital will allow Lyft to continue growing its business privately.
"We will go public when it's right for us," said a spokesman for Lyft.