KKR joins Lyft funding round of $600 million
Latest infusion values S.F. company at $7.5 billion
Lyft, the San Francisco ridehailing company, said it has closed a $600 million round of financing, valuing the company at $7.5 billion. New Lyft investors include private-equity firm KKR & Co., asset management firms Baillie Gifford and AllianceBernstein, and the Canadian pension fund PSP Investments, the company said.
Lyft, first known for its pink-mustachioed cars, raised $1 billion at a $5.5 billion valuation in a December 2015 round led by General Motors. This latest funding round includes existing investors Rakuten and Janus Capital Group.
Lyft is tapping a set of investors who frequently back public companies or provide funding just ahead of an initial public offering. The company has been quiet about the timing of an IPO, but investors in Lyft and Uber Technologies have long speculated that Lyft would be smart to try to enter the public market before its much larger competitor. One
Uber investor compared the dynamic to the Chinese ecommerce companies Alibaba Group and JD.com. Once the smaller JD.com went public, Alibaba soon followed.
“Lyft is fundamentally changing the way people think about car ownership and transportation,” George Roberts, co-CEO of KKR, said in a email. “With ride sharing increasingly in high demand, we are proud to partner with Lyft for their differentiated customer-centric culture, impressive growth strategy and exceptional management team, and to work together to change transportation for the better for both passengers and drivers.”
Lyft has benefited from several dramatic stumbles on the part of archrival Uber this year.
Hundreds of thousands of people removed the Uber app because of the company’s reaction to President Trump’s first travel ban. Lyft said it experienced a 60 percent increase in new passengers after that.
In the first three months of 2017, Lyft generated a 34 percent increase in rides to 70.4 million, compared with the number at the end of 2016 and 142 percent rise from the period a year earlier.
The number of people who said they would consider taking Lyft has jumped to 9.6 percent this month from 5.6 percent in September, according to a report compiled by the market research firm YouGov BrandIndex for Quartz. Meanwhile, the number of people who said they would consider taking Uber fell to 14 percent from 18 percent in November.
Lyft lost about $600 million on $700 million in revenue in 2016, people familiar with the matter said in January. While Lyft has said it wants to reduce its losses, the company has continued to raise money to sustain its expenses, including offering discounted rides and paying drivers bonuses to lure them away from Uber.
Lyft operates only in the United States, though the company has long teased that it would consider venturing overseas. Lyft has started service in 100 U.S. cities already this year.
“We’re working hard bringing Lyft’s mission to life, improving people’s lives with the world’s best transportation,” John Zimmer, the ride-hailing company’s co-founder and president, said in a statement. “We have big plans on the horizon, and will continue investing in new technology and hospitality in order to create experiences that passengers and drivers will love.”