Lyft Raises $1 Billion in Round Led by Alphabet's CapitalG -- Update
October 19 2017 - 12:53PM
Dow Jones News
By Greg Bensinger and Jack Nicas
Ride-hailing startup Lyft Inc. said it raised $1 billion in a
funding round led by Alphabet Inc.'s CapitalG unit, boosting its
valuation by nearly 50% as it eyes expansion.
The San Francisco firm said Thursday it is now valued at $11
billion including the new funds. Lyft has raised some $3.61 billion
in total.
CapitalG partner David Lawee is joining Lyft's board, bringing
it to 10 directors.
Lyft, which operates only in the U.S., has been looking to
Canada and overseas for possible new markets, according to people
familiar with the matter. It has moved into dozens of new cities in
its home country in recent months as it takes on bigger rival Uber
Technologies Inc.
As Uber has fought back a wave of bad press amid a series of
scandals and executive departures, Lyft has stayed largely above
the fray, steadily gaining share in key markets. Over the summer it
added former Obama adviser Valerie Jarrett to its board.
With its investment, Google-parent Alphabet pulls closer to Lyft
and gets more say in the ride-hailing company's direction. That
could be useful as Alphabet's Waymo unit plans its own ride-hailing
service with self-driving cars. A CapitalG spokesman said the
investment is about turning a profit for Alphabet.
"It's a belief in Lyft, their business model, their future
growth and not strategic positioning," the spokesman said.
While Waymo is considered by many to have the world's most
advanced self-driving technology, it knows little about operating a
taxi business. Indeed, Waymo and Lyft said in May they are
collaborating on self-driving technology, including tests of a
self-driving taxi service, a person familiar with the deal said at
the time.
CapitalG invests in late-stage companies such as Snap Inc. and
Airbnb Inc., unlike Alphabet's other investment firm GV, which
largely funds younger firms. Mr. Lawee runs CapitalG, and
previously managed acquisitions and investments at Google.
The size of CapitalG's investment in Lyft, and how many other
investors are in the round, isn't clear. CapitalG's investments
typically range from $50 million to $100 million.
The deal further complicates Alphabet's alliances in the
ride-hailing business.
Alphabet already is an investor in Uber after GV invested $258
million in the ride-hailing giant in 2013. But their relationship
has soured over the years, reaching a head in February when
Alphabet's Waymo sued Uber for allegedly stealing its
self-driving-car trade secrets to jump-start its own driverless-car
program.
Uber denies the allegations. A federal jury trial is set for
December.
Write to Greg Bensinger at greg.bensinger@wsj.com and Jack Nicas
at jack.nicas@wsj.com
(END) Dow Jones Newswires
October 19, 2017 12:38 ET (16:38 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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