Lyft gets $1bn boost from Alphabet's investment fund

Alphabet Leads $1B Investment in Uber Rival Lyft

Alphabet Leads $1B Investment in Uber Rival Lyft

Waymo, Alphabet's self-driving auto company, has partnered with Lyft to develop and test its technology, and is now locked in a legal battle with Lyft's rival Uber.

But while the stake in Uber is worth a lot more than the stake in Lyft, the two companies have an increasingly frosty relationship, based largely on a fractious court case concerning stolen self-driving vehicle technology.

CapitalG, the investment arm of Alphabet, was formed in 2013 under the name Google Capital.

That's still a fraction of Uber's market cap, which is somewhere between $50bn and $70bn, but it pegs the company as a major domestic competitor to the trouble-stricken cab firm. Although the company is struggling to get back on its feet under new administration, it is still standing at the top of the market, valued at $69bn. As a result, Lyft has announced that it's looking for ways to go public before the end of next year. On paper, Uber remains the far more valuable company. The investment round is still open and will include other participants.

Alphabet's funding boost will help Lyft step up its challenge just as Uber faces up to the potential loss of its London licence. The new financing may reignite the subsidy wars or it could usher in a new era of responsible, albeit well-funded, competition.

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The round was led by CapitalG - Alphabet's growth investment fund. David Drummond, Alphabet's chief legal officer, took a board seat. The company accuses former Uber engineer Anthony Levandowski of stealing trade secrets while he was still an employee at Waymo.

In February, Waymo, Google's self-driving vehicle company, had filed a lawsuit against Uber for allegedly using its stolen technology on autonomous driving.

There's a long history of technology companies investing in the next generation of upstarts. Where GV focuses on early-stage funding, CapitalG typically invests in late-stage companies such as Airbnb, Stripe and Snap Inc.

Japanese telecom company SoftBank has been known to invest similarly. The latest investment for Lyft only serves to complicate the financial relationships in the ride-hailing industry.

Nonetheless, there is still a large abyss that separates Lyft and Uber. However, Lyft is still way behind Uber, despite its continuous internal and PR issues. But this year, Lyft has closed the valuation and market-share gap. While Uber was damaging its PR image and internal culture, Lyft was busy building a powerful brand.

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