Lyft is reportedly in the process of fundraising a new round of capital, taking advantage of Uber’s current internal crisis. It’s reported that the on-demand ride-hailing service is talking to potential investors about putting in at least $500 million at a valuation of between $6 billion and $7 billion.
A Lyft spokesperson declined to comment.
First reported by The Wall Street Journal, the latest round of funding would likely go toward Lyft’s efforts to expand in order to compete against Uber and other up-and-comers. In 2017, when Lyft has already launched in nearly 100 new markets across the U.S. and as Uber has hit a stumbling block, the time may be right for the No. 2 on-demand car service to accelerate its marketing and brand efforts, which requires some funding.
The company boasts that Lyft riders last year put back $750 million into the local economy and that its service has reduced commute time by 26 million hours. This was the conclusion of a self-commissioned study that also revealed that Lyft drivers received $1.5 billion in earnings, along with $100 million in tips, in 2016.
While Uber is better-known and more widely available, Lyft is actively positioning itself as a polar opposite. Yes, it does provide transportation to and from destinations, but the manner in which it does so can be vastly different. Lyft appears to want drivers to have a pleasant experience while also making money, whereas Uber is looking at not only giving people the opportunity to make money off of idle vehicles, but trying to solve the first- and last-mile issue for many challenges, including delivery.
Even so, Lyft is falling way behind in terms of market availability and investment. While the company claims that it’s going to be more aggressive in 2017 in terms of expansion, maybe it’s not just physical cities it’s launching in — it could also be all about increasing the size of its war chest.
To date, Lyft has raised more than $2 billion in nine rounds of venture funding from across a list of investors including Andreessen Horowitz, fbFund, K9 Ventures, Floodgate, Mayfield Fund, Founders Fund, Rakuten, Icahn Enterprises, Alibaba, and General Motors.