Automotive systems producer Magna International agreed on Wednesday to invest $200m in US-based ride hailing service Lyft as part of a multi-year strategic collaboration deal.
Founded in 2012, Lyft has established itself as the second largest on-demand ride platform in the US, behind Uber, and recently entered its first international market in Toronto, Canada. The Magna funding values the company at $11.7bn. according to the Financial Times.
The partnership will involve the companies making joint investments in the development and manufacturing of autonomous driving systems. Lyft is already working on and testing driverless car technology and has established a dedicated research centre in Silicon Valley.
Magna will bring its expertise on in-car systems, vehicular safety, driver assistance technology and manufacturing to the partnership while Lyft will contribute its existing technology and driver data. They have also agreed to share intellectual property.
Swamy Kotagiri, chief technology officer of Magna, said: “There is a new mobility landscape emerging and partnerships like this put us at the forefront of this change.
“Lyft’s leadership in ride sharing and Magna’s automotive expertise makes this strategic partnership ideal to effect a positive change as a new transportation ecosystem unfolds.”
The investment will bring Lyft’s total funding to about $3.8bn. CapitalG, the subsidiary of internet technology group Alphabet formerly known as Google Capital, led a $1.5bn round for the company that closed in December 2017.
The 2017 round included e-commerce firm Rakuten, Fidelity Investments, Ontario Teachers’ Pension Plan, AllianceBernstein, Baillie Gifford, KKR and Janus Henderson.
E-commerce group Alibaba joined Coatue Management, Third Point Ventures, Andreessen Horowitz, Founders Fund and Mayfield Fund for the company’s $250m series D round in 2014, before returning for a $680m round in 2015 alongside Rakuten, internet company Tencent, ride hailing service Didi Chuxing and conglomerate Icahn Enterprises.
Lyft raised $1bn in a January 2016 round led by carmaker General Motors that included Alibaba, Didi Chuxing, Kingdom Holding and Janus Capital, before Rakuten, Janus, AllianceBernstein, Baillie Gifford and KKR added $600m in April 2017.
Another automotive manufacturer, Jaguar Land Rover, joined its InMotion Ventures unit to invest another $25m in Lyft in June. Magna has been an occasional corporate venturer but the Lyft deal will be the largest investment it has made in a VC-stage company so far.