Ride-hailing platform Lyft has raised $1 billion in a funding round led by Google-parent firm Alphabet.
CapitalG, which is an investment arm with Alphabet, is leading the investment and will join Lyft’s board, said a report. This will push the competition with rival Uber a notch up.
The latest investment will help Lyft go aggressive in many markets, where Uber has market lead. However, it is surprising for many as Alphabet backed Uber earlier. Uber also got an infusion of about $250 million from Google in 2013, earning Google’s David Drummond a seat on Uber’s board.
But recently their relationship soured and had clashed over autonomous vehicle technology.
Alphabet’s self-driving car unit, Waymo alleges that Uber is using one of Waymo’s trade secrets for its autonomous vehicle sensors.
Lyft, now worth $11 billion, is still much smaller than the nearly $70 billion market leader Uber. In March this year, Lyft has acquired Pune-based startup FinitePaths.
Meanwhile, Uber is also trying to get through a major investment from Softbank. The Japanese conglomerate, which was in talks with Uber for the past few months, will make the investment through its $93 billion Vision Fund and acquire between 14-20 percent in the ride-sharing company.
If the funding gets the green signal, Uber will certainly consolidate its position in ride-hailing space. Besides SoftBank, investment firms General Atlantic and Dragoneer Investment Group are also in active talks with Uber.
This will also bring Softbank and Alphabet against each other, with one backing Lyft and other with Uber. Both companies are betting big on the ride-hailing market as it continues to grow.
According to Uber co-founder Travis Kalanick, Google is intending to compete with Uber in the ridesharing space.
However, Kalanick has since left his operational role at Uber, as the company reels from a workplace culture investigation that flushed out many key employees. New CEO Dara Khosrowshahi has taken up the job and plans to take it for an IPO.