EMERGING TECH
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EMERGING TECH
Lyft raises new $500M round to take on the struggling Uber
Ride-hailing startup and Uber Technologies Inc. rival Lyft Inc. has raised $500 million in a new round, according to unconfirmed reports published Thursday.
The New York Times claimed the round was raised at a valuation of $6.9 billion, while CNBC put the valuation at $7.5 billion. Lyft last raised money in January 2016 with a $500 million investment from General Motors Inc. on a valuation of $5.5 billion.
Lyft was first rumored to be looking to raise more money or possibly even seeking someone to acquire it when it hired Qatalyst Partners LP in June. Qatalyst founder Frank Quattrone was reported to have contacted companies, including large automakers, about acquiring a stake in Lyft. None of the reports today claimed to know which companies Lyft raised the money from, but it may well be a car maker, with previous investor General Motors likely to have at least been involved in the round.
The news comes at a time of trouble for rival Uber, which has faced a range of negative publicity in recent times, including accusations that it is not diverse enough, that the company is sexist and that it stole its self-driving car technology from Google Inc. Perhaps worse still, that technology was highly unreliable. While not Uber’s fault, one of its cars was subsequently involved in a crash in Arizona, causing the company to temporarily suspend its self-driving car testing program.
Lyft has taken a more steady-as-she-goes path to growth, gradually expanding its presence into more and more cities within the United States, although a report in January noted that the company was considering international expansion. On the self-driving front, Lyft has also been far more conservative than Uber, joining with General Motors to first start testing self-driving “electric taxis” later this year and then expanding the program to thousands of vehicles in 2018.
Presuming the new round closes at $500 million, Lyft has now raised $2.51 billion over 10 rounds, giving it a solid war chest to continue to challenge Uber well into the future.
Photo: raidokaldma/Flickr
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