Lyft gets a further $500 million from CapitalG


(Brandon Bhangoo) #1

Lyft is continuing to enjoy the Uber-Alphabet fallout with an initial investment of $1 billion and now a further bonus of $500 million. This extra round includes investment from Ontario Teachers' Pension Plan and Fidelity Management & Research Company as well as previous investors including KKR, Rakuten, Alliance Bernstein, Janus Henderson Investors, and Baillie Gifford. This new investment adds to the total Lyft has raised to $11.5 billion.

2017 has been a good year for Lyft, with massive expansion and clever investment growth, this company, led by President John Zimmer have doubled their rides from 2016 to 1million rides a day, leading 2017 to a 360 million ride year and growing, as well as expanded into 50 states and recently entered Canada, Lyfts first global expansion step.

Lyft has been expanding its reach into the autonomous vehicle sector with massive investments and partnerships with companies including Ford, Waymo, GM and Jaguar (Owned by Tata), Driv.AI., and NuTonomy.

Recent studies have shown that the rideshare market is far from capping out, in fact, the rideshare market only accounts for 0.5% of all miles traveled and in 2016, the Pew study showed that 15% of all US adults never used a ridesharing app and 33% never heard of ridesharing, while quite a lot heard of ridesharing but didn't understand what it actually provides.

While Google was one of the earliest large investors in Uber, it is now invested in Lyft due to a rift that led Waymo, googles (Alphabets) AV company to sue Uber for data theft when Uber partnered with Ottomotto. capital is Alphabet's investor arm, and it now has a representative on Lyfts board.

Lyft leaked a document to Bloomberg that went on to claim that Lyft has boosted its US market share by 61% during 2017 and has reached close to a third of the market. These gains are directly attributed to the failures in Kalanick’s handling of Uber affairs which are still being dealt with by his replacement. With all of Uber’s problems and Lyft’s advancements, Lyft will still maintain losses due to continual injections of capital into growth and app upgrades and will not reach break-even as originally projected.

With that being stated, the document is forecasting a break-even state next year, 2018 and claims that Lyft’s earnings will rise to $500 million in 2019 and over $1 billion during 2020. However, Lyft has increased its spending ratio to take advantage of Uber’s problems, and the company will most probably only break even towards the end of 2018 and not during 2018.

Before Uber’s mid-year crisis, Lyft only held a small percentage of around 11-15% in the US market. This percentage included all of Uber’s services as against Lyft’s, where Uber also had various delivery services that Lyft does not. However, when concentrating on the ridesharing market alone, Lyft’s percentage reached closer to 20%. Uber’s market share calculations started out at in 2017 showing 80% in 2017, but now they show that Uber only controls 70%.


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