Lyft Raises $1 Billion in Round Led by Alphabet's CapitalG -- Update

By Greg Bensinger and Jack Nicas Features Dow Jones Newswires

Ride-hailing startup Lyft Inc. said it raised $1 billion in a funding round led by Alphabet Inc.'s CapitalG unit, boosting its valuation by nearly 50% as it eyes expansion.

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The San Francisco firm said Thursday it is now valued at $11 billion including the new funds. Lyft has raised some $3.61 billion in total.

CapitalG partner David Lawee is joining Lyft's board, bringing it to 10 directors.

Lyft, which operates only in the U.S., has been looking to Canada and overseas for possible new markets, according to people familiar with the matter. It has moved into dozens of new cities in its home country in recent months as it takes on bigger rival Uber Technologies Inc.

As Uber has fought back a wave of bad press amid a series of scandals and executive departures, Lyft has stayed largely above the fray, steadily gaining share in key markets. Over the summer it added former Obama adviser Valerie Jarrett to its board.

With its investment, Google-parent Alphabet pulls closer to Lyft and gets more say in the ride-hailing company's direction. That could be useful as Alphabet's Waymo unit plans its own ride-hailing service with self-driving cars. A CapitalG spokesman said the investment is about turning a profit for Alphabet.

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"It's a belief in Lyft, their business model, their future growth and not strategic positioning," the spokesman said.

While Waymo is considered by many to have the world's most advanced self-driving technology, it knows little about operating a taxi business. Indeed, Waymo and Lyft said in May they are collaborating on self-driving technology, including tests of a self-driving taxi service, a person familiar with the deal said at the time.

CapitalG invests in late-stage companies such as Snap Inc. and Airbnb Inc., unlike Alphabet's other investment firm GV, which largely funds younger firms. Mr. Lawee runs CapitalG, and previously managed acquisitions and investments at Google.

The size of CapitalG's investment in Lyft, and how many other investors are in the round, isn't clear. CapitalG's investments typically range from $50 million to $100 million.

The deal further complicates Alphabet's alliances in the ride-hailing business.

Alphabet already is an investor in Uber after GV invested $258 million in the ride-hailing giant in 2013. But their relationship has soured over the years, reaching a head in February when Alphabet's Waymo sued Uber for allegedly stealing its self-driving-car trade secrets to jump-start its own driverless-car program.

Uber denies the allegations. A federal jury trial is set for December.

Write to Greg Bensinger at and Jack Nicas at

(END) Dow Jones Newswires

October 19, 2017 12:38 ET (16:38 GMT)