Economy

Google owner leads $1bn funding for Uber rival

The new financing, which comes as Uber looks to close a multibillion investment from SoftBank Group Corp., boosts Lyft's valuation by almost 50% to $11 billion. Lyft has also inked deals with Jaguar Land Rover and Ford, and General Motors invested $500 million in the company previous year.

The falling out dates back to previous year when Kalanick became convinced that Waymo meant to deploy its robotic cars in a rival ride-hailing service.

As we explained recently, Lyft has been putting together a host of partnerships of late, an Android-like strategy that is positioning the company well for the coming years.

The startup on Thursday said it raised $1 billion in funding led by a venture-capital fund of Google parent Alphabet Inc., giving Lyft financial ammunition as it eyes a first-time expansion beyond the USA and broadens its driverless-car efforts. Lyft was quick to capitalise, donating to the American Civil Liberties Union and issuing a string of progressive political statements.

The funding is bad news for Uber, which is trying to finalize a major investment from SoftBank Group. Even if the SoftBank deal were to go through as expected, a well-financed Lyft is not likely to make things easier for Uber. On paper, Uber remains the far more valuable company. Uber has been valued at as much as $70bn. David Drummond, Alphabet's chief legal officer, took a board seat.

There's a long history of technology companies investing in the next generation of upstarts. Waymo sued Uber in February for allegedly stealing its driverless-car trade secrets to jump-start its own program.

Lyft Inc.is quietly gaining ground on Uber Technologies Inc. while its larger crosstown ride-hailing rival has been embroiled in months of corporate drama and setbacks. But this year, Lyft has closed the valuation and market-share gap.

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.

Uber mulled acquiring Lyft back in 2014. Lyft has also flirted with worldwide expansion, while Uber already operates in more than 70 countries.



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