Lyft raises $600 million: How much is it worth now?
San Francisco-based ride-services firm Lyft has raised $600mn in a fresh funding round, fuelling the company's growth. Lyft said the funding round, which had been widely anticipated, was in progress for several weeks. The fund came mostly from larger global investment funds rather than venture capital. Lyft is now valued at $7.5bn, a jump from $5.5bn at its last funding over a year ago.
About Lyft
Lyft is an American transportation network company headquartered in San Francisco. Logan Green and John Zimmer launched the mobile app in Jun'12 that facilitates ridesharing by connecting passengers and drivers who have a car. Lyft offers its services in about 300 American cities. The company was valued at $5.5 billion in Jan'16 when it raised $1 billion from investors including General Motors Co.
Lyft's growth and competitors
In 2014, Lyft said its revenue and ride numbers had grown five-fold. It faces competition from other transportation and car service startups like Uber, Via, Dryver, Haxi, etc. Lyft's global alliance includes Didi Chuxing, India's Ola Cabs, and Southeast Asia's Grab.
Funding, valuation exceed previous targets
Previous investors like Japan's internet company Rakuten and investment fund Janus Capital Group participated in the funding round. Funding also came from first-time Lyft investors, including private equity company KKR & Co., large asset manager Baillie Gifford, and one of Canada's largest pension funds, the Public Sector Pension Investment Board. Both funding and valuation exceeded previous targets as Lyft reportedly aimed to raise $500mn.
The funding round
The funding round is an example of how sovereign wealth funds, pension funds, family offices, and large asset managers that traditionally have invested in public companies are now putting more of their money into private tech-related start-ups with hopes of better returns.
Lyft continues to fiercely compete with rival Uber
Though Lyft trailed Uber in the market share in most regions of the US, Uber remains to be Lyft's main rival in the country. In a fierce competition, Lyft has heavily invested in growth. So far in 2017, Lyft expanded services to 100 new cities, bringing the total number of cities it operates to 300. Lyft reportedly completed 70.4 million rides in Q1 2017.
Uber too continues to grow
Despite a series of embarrassments recently, Uber, too, is continuing to grow. The list includes sexual harassment allegations from a former employee, successive executive departures, a video showing CEO Travis Kalanick harshly berating a driver, and a lawsuit from Alphabet's self-driving car unit accusing it of stealing intellectual property. In March, Uber claimed it reached a record number of weekly rides in the US.
Uber, much more valuable than Lyft
Uber is over nine times more valuable than Lyft with a valuation of about $70 billion, despite its problems. However, Lyft has reportedly been taking advantage of Uber's fall with do-gooder initiatives like donating spare change from rides to charity.
