Lyft, the ride-haiing startup that isn't Uber, is in talks to raise up to $1 billion in new financing, according to Bloomberg. Coupled with Uber's own recent stratospheric valuation, it is further evidence of the confidence investors have in the ride-hailing industry's potential to grow far beyond the simple act of sharing a ride.
A little more than a month ago, Lyft was reportedly eyeing a $500 million round of financing. Since then, though, the San Francisco-based startup announced that it was joining forces with a dream team of other ride-hailing companies in a bid to share passengers, technology, and, yes, stop Uber's spread into China and other Asian countries.
Lyft could be valued at as much as $4.5 billion
Now Lyft is doubling its anticipated round of fundraising, a sign that the company's aggressive competition with Uber is paying off. Citing two valuation experts — who had no knowledge of any internal financial information — Bloomberg said this latest financing could value Lyft between $3.9 billion and $4.5 billion. Meanwhile, Uber is reportedly seeking $2.1 billion for a valuation of $62.5 billion. The gulf between the two valuations represents Uber's top-tier status in the industry.
The dumptrucks of money flowing to companies like Uber and Lyft is less about the core business of providing reliable ride from point A to point B, and more about the potential to disrupt other industries, like food and package delivery and public transportation. Uber has been testing a variety of products toward that goal, as well as developing driverless car technology, while Lyft has focused mostly on its price- and turf-war with Uber.
The money will come in handy as those companies fight lawsuits by drivers and lobby state governments to pass ride-hail-friendly laws. A key question is when Uber, Lyft, or any of its rivals will choose to go public. With the raging river of VC capital showing no signs of slowing down, the answer is probably not any time soon.