FRANCISCO — In the topsy-turvy world of tech, an
investor can fund a company one minute and sue it the
next. It also can turn around and fund a competitor,
which is what Google’s parent company did when it
announced Thursday that its growth equity fund led a $1
billion investment in Lyft, four years after its venture
capital arm invested in Uber.
injection of cash increased Lyft’s valuation to $11
billion, up from around $7.5 billion in April when it
last raised $500 million from unnamed investors, and up
further still from its $5.5 billion valuation last year.
part of the deal, David Lawee — a partner at Alphabet’s
CapitalG growth equity fund — will join Lyft’s board
is honored to work with Lyft’s compelling founders and
strong leadership team," Lawee said in a statement.
"Ridesharing is still in its early days and we look
forward to seeing Lyft continue its impressive
is a separate entity from GV, Alphabet’s venture
capital arm, which invested in Uber in 2013. Where GV
focuses on early-stage funding, CapitalG typically
invests in late-stage companies such as Airbnb, Stripe
and Snap Inc.
valuation, which is close to $70 billion, still dwarfs
Lyft’s. But the pink-mustachioed ride-hailing firm has
been nipping at the heels of its much bigger rival. As
Uber weathered a string of high-profile controversies
this year, including allegations of a culture of
harassment and bullying and the departure of its
controversial chief executive, Lyft has taken the
opportunity to raise money, expand its business and play
company’s latest funding round comes as Uber is
fighting a costly legal battle against Alphabet-owned
Waymo, which has accused the ride-hailing company of
obtaining stolen autonomous vehicle technology.
Uber nor Lyft is profitable, and past leaked financial
documents have shown that both companies have spent
heavily in marketing, offering driver bonuses and
incentives, and ride subsidies. Both firms continue to
rely on external funding.
investment in Lyft isn’t necessarily a vote of no
confidence in Uber, particularly since its two
investment arms operate independently of each other.
Rather, industry experts said it’s a sign of Alphabet
hedging its bets.
uncommon, but there’s nothing wrong with it, per
se," said Greg Sichenzia, a founding member of
Sichenzia Ross Friedman Ference Kesner LLP. "This
is just an obvious way for Google, which has endless
amounts of money, to hedge its bets. Now it wins either
telecom company SoftBank has been known to invest
similarly. The firm invested in Uber’s competitors in
China and Southeast Asia and is reportedly mulling a
significant investment in Uber itself. The Chinese
ride-hailing incumbent, Didi Chuxing, also previously
partnered with Lyft before buying Uber’s China
in the tech world also have been known to switch as
quickly as they form. GM, a major investor in Lyft, was
slated to partner its self-driving car subsidiary,
Cruise, with the ride-hailing firm. Since then, Lyft has
diversified its partnerships and started working with
Cruise competitors Waymo, Drive.ai, and nuTonomy.
Sources with knowledge of the matter said Cruise is now
in talks to work with Uber instead.
is a whole new world," Sichenzia said. "Back
in the ‘60s, if a bank funded Mobil, they couldn’t
fund the next oil company because they’d lose Mobil’s
business. But all that’s changed. Now, the money makes