Automotive manufacturer General Motors agreed yesterday to invest $500m in US-based ride hailing company Lyft as part of a strategic alliance to create an on-demand autonomous vehicle network in the US.
Lyft received the money a part of a $1bn round it is raising at a $5.5bn valuation, according to Reuters. GM will take a seat on Lyft’s board of directors.
Founded in 2012, Lyft runs an app-based ride hailing service that acts as Uber’s main competition in the US, where it operates in 190 cities.
The planned collaboration between GM and Lyft will involve the formation of an autonomous vehicle network using GM’s technology and Lyft’s ride sharing experience.
In the meantime, GM will become the preferred short-term use vehicle supplier for Lyft drivers at rental hubs in the US, enabling Lyft drivers to access GM’s OnStar connected car technology.
GM had previously invested in Turo, the peer-to-peer car sharing service then known as RelayRides, in 2011.
Lyft had raised about $1.35bn prior to GM’s investment. Kingdom Holding, the investment vehicle of the Saudi Arabian Prince al-Waleed bin Talal, invested $247.7m in Lyft last month, according to the Wall Street Journal.
E-commerce firms Alibaba – already an investor in Lyft’s $250m series D round – and Rakuten, China-based ride sharing company Didi Kuaidi, internet services firm Tencent and Icahn Enterprises provided $680m of series E funding for the company in May 2015.
Lyft’s other investors include Coatue Management, Third Point Ventures, Andreessen Horowitz, Founders Fund, Mayfield Fund, K9 Ventures and Floodgate.