Uber rival Lyft raises funds from Google arm ahead of public offer in 2018
20 October 2017
As its ride-hailing war against Uber intensifies, Lyft is looking to going public in 2018 and is trying to strengthen its position by raising more capital, including $1 billion in new financing led by an investment arm of Google's parent company.
According to two people briefed on the discussion, Lyft has been in talks with investment banks about an IPO next year. The people wished to remain anonymous as the talks were confidential, The New York Times reported. Lyft has not decided which bank to make its lead underwriter for an IPO, the people said.
To bolster itself ahead of any public offering, Lyft yesterday said it had raised $1 billion in financing led by CapitalG, a venture investment arm of Google's corporate parent, Alphabet. The funding valued Lyft at $10 billion before the infusion of new capital, a significant jump from the company's last valuation of $6.9 billion.
According to commentators, the new investment further complicated the tangled web of financial relationships in the ride-hailing industry, where companies like Lyft and Uber have pulled huge amounts of funding from firms that often put money into competing companies.
However, with the financing, Lyft will also get a new and formidable partner in Alphabet in the person of David Lawee a venture partner at CapitalG, who will take a seat on Lyft's board of directors.
Lyft has gained market share in the US this year thanks to the exit of executives at Alphabet and controversy over Alphabet's ties to the Trump administration. Lyft was quick to capitalise, donating to the American Civil Liberties Union and issuing a string of progressive political statements.
The development is bad news for Uber, which is trying to finalise a major investment from SoftBank Group Corp. Even if the SoftBank deal were to go through as expected, a well-financed Lyft is not likely to make things easier for Uber.