Large Investment of the Year: Lyft

It is an almost Lazarus-like tale for Lyft – competitor Uber’s former CEO Travis Kalanick had turned down an offer to acquire Lyft in 2014 in exchange for 18% of Uber, according to analysis site Stratechery.

Based in San Francisco and operating in the US and Canada, Lyft progressively earned itself the status of main contender to Uber, which remains the number-one ride-hailing app in its home market but has failed to kill off its closest local rival. Lyft reportedly doubled its number of rides more recently, having recorded an average 10 million rides a week in 2017, and an estimated 550 million rides in total last year, according to financial publication Forbes.

Founded in 2012, Lyft has been marketing itself as a more ethical and customer and driver-friendly alternative to other cab-hailing services, having, for instance, been the first to offer users the ability to tip drivers via the app. While Uber and Lyft continue their head-to-head competition to dominate the US market, both should be going public in 2019, with Uber’s valuation currently projected at around $120bn for its IPO. Bloomberg reported that Lyft had hired advisory firm Class V Group to prepare for taking pitches from potential underwriters from September 2018.

Having recently hit the billion rides milestone, Lyft has so far secured $4.4bn in equity funding through numerous rounds, the most recent of which was a $600m series I round in June 2018 led by financial services group Fidelity Management and Research, with participation from hedge fund Senator Investment Group. The investment, which considerably increased the company’s valuation, also included corporate backers General Motors, Alphabet, Alibaba, Rakuten and Magna International.

Earlier last year, automotive systems maker Magna International invested $200m in Lyft to seal a partnership in which the two collaborate on autonomous driving research and development. Valued at $11.7bn at the time, Lyft was already working on and testing driverless car technology at a dedicated research centre in Silicon Valley, California. Swamy Kotagiri, Magna’s chief technology officer, said at the time: “There is a new mobility landscape emerging and partnerships like this put us at the forefront of this change. Lyft’s leadership in ride-sharing and Magna’s automotive expertise make this strategic partnership ideal to effect a positive change as a new transportation ecosystem unfolds.”

Lyft first secured corporate backing through a $250m series D round in 2014, attracting e-commerce group Alibaba as well as Andreessen Horowitz, Founders Fund, Coatue Management, Third Point Ventures and Mayfield Fund. Alibaba returned the following year for a $680m series E round, joined by e-commerce firm Rakuten, internet group Tencent, on-demand ride provider Didi Chuxing and conglomerate Icahn Enterprises.

Automotive manufacturer General Motors then led a $1bn round in early 2016 that featured Alibaba, Didi Chuxing, Janus Capital and Kingdom Holding, before Lyft obtained $600m from Rakuten, AllianceBernstein, Baillie Gifford, Janus Henderson and KKR in April 2017. InMotion Ventures, the investment division of carmaker Jaguar Land Rover, provided $25m in June 2017 before CapitalG, the growth equity arm of diversified conglomerate Alphabet, led a $1.5bn round for Lyft in December the same year. Fidelity also took part in the December round alongside Rakuten, AllianceBernstein, Baillie Gifford, KKR, Janus Henderson and Ontario Teachers’ Pension Plan.

In more recent news, the car-hailing service in October last year acquired autonomous driving software developer Blue Vision Labs from Alphabet’s venture arm GV in a deal reportedly sized at $72m. Shortly afterwards, the group announced its partnership with carpooling service Scoop, mostly aiming at supplementing the latter’s offering to customers working for large corporations such as LinkedIn, Symantec or Samsung.

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