US-based ride sharing service Lyft raised $530m yesterday at a $2.5bn valuation from investors including internet services company Rakuten, which paid $300m for an 11.9% stake.
Lyft operates an online cab hailing service similar to Uber’s, and although it has been outpaced by its US-based rival, it has aimed to position itself as a more fun and caring alternative, employing a pink moustache as its symbol.
The series E round took Lyft’s overall funding to more than $860m since it was founded in 2007, and follows a $250m series D round backed by e-commerce company Alibaba, Coatue Management, Third Point Ventures, Andreessen Horowitz, Founders Fund and Mayfield Fund in April 2014.
Reports surfaced last month suggesting Lyft would imminently close a $200m round at a $2bn valuation, but Rakuten’s involvement would appear to have seriously increased the round’s size.
Lyft will use the series E capital to expand its business both domestically, where it is present in 65 cities with more to come, and to enter overseas markets.
The company also plans to expand Lyft Line, a service that connects users with others along their route, enabling them to pool the cost of rides.
Hiroshi Mikitani, Rakuten’s founder and CEO, said: “We have seen the future and this is it. By empowering human connection, the sharing economy is going to fundamentally transform the service industry and benefit society.
“We believe businesses like Lyft that unlock the latent potential that exists in people and society hold the key to the future.”
The investment comes in the wake of massive fundraising by Uber, which has raised an astonishing $5.6bn in debt and equity since Lyft announced its series D funding.
– Photo courtesy of Lyft