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Lyft raises US$530m in Rakuten-led funding round
[SAN FRANCISCO] Ride-sharing service Lyft said it raised an additional US$530 million in a funding round led by Japanese online retailer Rakuten.
Lyft will use the funds to expand its presence in the 65 markets it operates in, and to invest in Lyft Line - a service that allows users to share cabs.
Rakuten is investing US$300 million for an 11.9 per cent stake in Lyft, which uses a smartphone-based app to match riders with paid drivers who use their own cars rather than livery vehicles.
The financing, which also includes new investor Fortress Investment Group, values three-year-old Lyft at more than US$2.5 billion, according to the Wall Street Journal.
"Lyft is the future of the economy. By empowering the connections between people, the sharing economy will fundamentally change the service industry and merit society," Rakuten chief executive Hiroshi Mikitani said in a statement.
Rival ride-sharing company Uber raised US$1.6 billion in convertible debt in January from wealth management clients of Goldman Sachs, a month after a US$1.2 billion funding round that valued the US taxi service at US$40 billion.
San Francisco based Lyft, known for cars sporting fluffy pink moustaches, raised US$250 million last April, valuing it at above US$1 billion.
Lyft's investors include New York-based technology hedge-fund Coatue Management and Andreessen Horowitz among others.