Internet and technology conglomerate Alphabet has held talks with US-based ride hailing platform Lyft over a $1bn investment. Bloomberg reported yesterday citing people familiar with the matter.
The funding would likely come from one of Alphabet’s subsidiaries, either internet technology provider Google or growth capital unit CapitalG. A possible valuation was not disclosed, but Lyft was valued at $7.5bn as of its last major funding round, in April 2017.
Lyft runs an on-demand ride service that spans 40 US states as of the end of last month, and which reached 1 million rides per day in July this year, though it remains the number two player in the US market behind Uber.
The prospective cash would enable the company to maintain an expansion push in the wake of Uber’s recent bad publicity. Lyft has just launched a television advertising campaign and an international push has been mooted since January this year.
Lyft has so far raised more than $2.1bn in funding, most recently securing $25m from automotive manufacturer Jaguar Land Rover and its InMotion Ventures subsidiary in June.
E-commerce firm Rakuten had joined KKR Next Generation Technology Fund, Janus Capital Group, Baillie Gifford, AllianceBernstein and PSP Investments to provide $600m of series G funding at the $7.5bn valuation two months earlier.
Rakuten also took part in a $1bn round for Lyft in a January 2016 series F round that included $500m from carmaker General Motors, as well as capital from e-commerce group Alibaba, ride hailing service Didi Kuaidi, Janus Capital Management and Kingdom Holding.
Alibaba, Coatue Management, Third Point Ventures, Andreessen Horowitz, Founders Fund and Mayfield Fund had supplied $250m in Lyft’s 2014 series D round before Alibaba, Rakuten, Didi Kuaidi, internet group Tencent and Icahn Enterprises added $680m in mid-2015.
A possible barrier to the investment is that Alphabet is already an investor in Uber, having participated in a $258m for the company in 2013 through its GV unit at a reported $3.5bn valuation.
Alphabet held a seat on Uber’s board until August 2016 when its own transport technology work created a conflict of interest, and its autonomous car development arm, Waymo, is currently suing Uber over trade secret theft allegations.