Alphabet INC, the parent company of search engine giant Google, is reportedly in talks to invest in cab hailing company Lyft – the arch-rival of Uber. Although not clear how much Alphabet is looking to invest, but sources claim that the investment could be anywhere near $1 billion.
Both Alphabet and Lyft have declined to comment on this news report.
A capital infusion of $1 billion dollars by tech giant like Google will offer a much needed boost to Lyft, which currently is the No.2 cab hailing company in the U.S. and is obviously desperate to catch up with Uber.
Interestingly, Alphabet is already an investor in Uber Inc, though it is not a major investor. But any investment relation between a tech powerhouse and world’s most valued startup was always going to attract eyeballs and it did. However, this bonhomie quickly fizzled out, after Alphabet’s self-driving car unit – Waymo – accused Uber of major trade thefts.
This crack in Alphabet & Uber’s brief relation seems to have augured well for Lyft, especially since it is in the midst of expansion mode and apparently hungry for more funds. It has already covered 50% of the U.S. market during the last 8 months and is now gearing to target quite a few international markets. Several reports suggest that the company has set its sight on lucrative markets like Canada, Australia and U.K.
While fresh investment by Alphabet will most certainly help Lyft in international expansion, but may force the cab hailing company in postponing its much anticipated IPO. Close sources claim that the company had earlier decided not to raise any fresh funds ahead of the IPO, which is tentively scheduled to hit the market in 2018.
Lyft has so far managed to raise over $2.5 billion through various rounds of funding, with the latest funding of $600 million arriving in April this year. The startup is currently valued at nearly $7.5 billion.