Lyft’s Valuation Doubles to $15.1 Billion Over One Year in Battle With Uber
Fidelity is leading a $600 million round to help Lyft keep apace of its bigger rival
Ride-hailing firm Lyft Inc. has raised new capital that doubles its valuation from last year to $15.1 billion and gives it more firepower as bigger rival Uber Technologies Inc. tracks toward an initial public offering.
Lyft said it raised $600 million primarily from existing investors, about six months after raising $1.5 billion at an $11.5 billion valuation. It was valued at $7.5 billion in April 2017.
The new round is being led by asset manager Fidelity Investments, which has poured some $800 million into Lyft, and includes hedge fund Senator Investment Group LP and others.
The investment should help Lyft keep apace of Uber, which raised $1.25 billion in new capital in January from SoftBank Group Corp. and has said it is planning to seek an IPO in next year’s second half.
Lyft has weighed its own IPO, according to people familiar with the matter, though it may not beat Uber to the punch. With Uber valued recently at $72 billion as part of a settlement granting equity to Alphabet Inc.’s Waymo, its IPO is likely to be one of the largest in recent memory.
Both companies are battling for the future of transportation, investing billions in yet unproven self-driving vehicles and snapping up technology and competitors that offer rentable bicycles and scooters for shorter hops within urban centers.
Lyft gained U.S. market share last year as Uber struggled with a series of scandals and legal setbacks. However, Lyft’s market share leveled in recent months to around 24%, or 27% when not including Uber’s Eats food delivery service, according to Second Measure, which tracks credit-card transactions. Lyft said in May it held 35% of the U.S. ride-sharing market.
The two San Francisco companies are battling on several fronts. Lyft last year moved into its first international market, Canada, and has eyed expansion into Europe and Latin America, according to people familiar with the matter. Lyft and Uber also are racing to develop self-driving vehicle technology that they believe could dramatically improve the profitability of ride-sharing and reduce traffic fatalities.
Both firms have filed applications in San Francisco for permits to operate electric scooters on city streets and are working on partnerships with public agencies to list transit times on their apps. Uber bought Jump, an electric bicycle company, for around $200 million and Lyft is negotiating the purchase of Motivate, known for its docked bikes such as the ubiquitous Citi-branded ones in New York.
This year Lyft is on a pace to record $7.7 billion in gross bookings, the amount it takes in before paying out drivers, according to a person familiar with the matter. Uber, by comparison, had $37 billion in gross bookings last year.
Since it was founded in 2012, Lyft has raised $5.1 billion to date, compared with more than $16 billion for nine-year-old Uber.
Corrections & Amplifications
Prior Lyft investors including the CapitalG unit of Google parent Alphabet Inc., KKR & Co. and Japanese e-commerce firm Rakuten Inc. did not participate in the most recent funding round. An earlier version of this article incorrectly stated that they were participants. (June 27, 2018)