Yesterday, ride-sharing company Lyft announced CapitalG, Alphabet VC arm, is leading a $1 billion investment round. The increase of capital will provide Lyft the opportunity to boost their momentum in the US market as Uber continues to recover from a year filled with controversy. Lyft has said expanding its ride-sharing network will be one of their biggest priorities.
“While we’ve made progress towards our vision, we’re most excited about what lies ahead. The fact remains that less than 0.5% of miles traveled in the U.S. happen on rideshare networks. This creates a huge opportunity to best serve our cities’ economic, environmental, and social futures,” Lyft said.
Although Lyft remains a distant second to Uber, in terms of market share and valuation, the latest funding round gives Lyft a $11 billion valuation; increasing from a $7.5 billion valuation in April. Uber was last valued at $70 billion.
In 2013 Google invested over $250 million in Uber through a different VC called Google Ventures, later rebranded by Alphabet as GV, serving as a powerful ally for Uber; managing to even get one of its top execs on the Uber board. However, as Uber invested in self-driving cars (competing directly with Alphabet) and Google began to test their own ride-sharing app, the relationship began to deteriorate. This year both companies have faced each other in court over allegations Uber used technology stolen by a former Google employee in their self-driving car project.
GV might have the opportunity to sell, at the very least, some of its stake in Uber in a highly anticipated deal between Uber and SoftBank Group Corp. SoftBank has expressed interest in buying between 7-$10 billion in shares from Uber employees and investors.
For some time now, Google has aligned itself with Lyft. Back in May, Alphabet’s self driving car division, Waymo, announced the they would work with Lyft to produce an autonomous car pilot program. Both companies have said the latest investment will not have any bearing on the Waymo partnership.
Lyft also announced that CapitalG partner David Lawee will join the company’s board; bringing it to a total of 10 directors.
“Ridesharing is still in its early days and we look forward to seeing Lyft continue its impressive growth,” Lawee said in a statement.
Lyft is said to be close to hiring an initial public offering advisory firm; a first concrete step the company could make to become publicly listed. However, this funding round may delay Lyft’s IPO plans as the increase in capital will allow Lyft to continue growing its business privately.
“We will go public when it’s right for us,” said Lyft spokeswoman Alexandra LaManna.
Lyft is currently available across 41 states and the company has said they complete more than a million rides a day.
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