(Reuters) – Lyft Inc has raised $ 1 billion in fresh financing, the ride-services company said on Thursday, in a round led by one of Alphabet Inc’s (GOOGL.O) investment funds, further complicating the convoluted world of ride-hailing alliances and dealing a blow to rival Uber Technologies Inc.
The round was led by CapitalG, the growth investment fund of Alphabet that has also backed large tech companies such as home-renting platform Airbnb and payments firm Stripe. Six months ago, Lyft raised a $ 600 million from a conglomeration of investors. Lyft said the latest round boosts its valuation to $ 11 billion from $ 7.5 billion.
Reuters in September reported investment talks between the companies.
CapitalG partner David Lawee will join the company’s board, Lyft said, bringing it to a total of 10 directors. (lft.to/2zB1NCw)
“Ridesharing is still in its early days and we look forward to seeing Lyft continue its impressive growth,” Lawee said in a statement.
Lyft, which runs a distant second to Uber [UBER.UL] in both size and valuation, has pushed expansion this year, adding more than 100 new cities since January. It says it is available across 41 states and is completing more than a million rides a day.
Lyft and Alphabet already have a relationship through a partnership Lyft struck with Waymo, Alphabet’s self-driving car unit, in May. The two companies are collaborating on bringing autonomous vehicle technology to market, but they have not provided many details.
Spokespeople for Lyft and Alphabet have said the latest investment will not have any bearing on the Waymo partnership.
Alphabet also has ties to Uber through its second investment arm, GV, which backs young startups. GV invested in Uber in 2013 but has since had a strained relationship with the ride-hailing company, as Uber began to develop autonomous cars and compete directly with Alphabet. Last year, Alphabet executive David Drummond stepped down from the Uber board as the relationship soiled.
“It is another punch by Alphabet at Uber,” said Erik Gordon, an entrepreneurship expert at the University of Michigan’s Ross School of Business.
Lyft is close to hiring an initial public offering advisory firm, in the first concrete step by the company to become publicly listed, Reuters reported in September.
This funding round may delay Lyft’s IPO plans, as the capital will allow Lyft to continue growing its business privately.
“We will go public when it’s right for us,” said Lyft spokeswoman Alexandra LaManna.
Reporting by Heather Somerville in Los Angeles and Arjun Panchadar and Munsif Vengattil in Bengaluru; Editing by Bernard Orr and David Gregorio