Lyft announced that CapitalG, the investment division of Google’s parent company, Alphabet, Inc., will invest $1 billion in the ride-hailing company. That investment values Lyft at $11 billion. But from the sound of it, Alphabet intends to work closely with Lyft going forward, as CapitalG partner David Lawee will also join Lyft’s board.
As Automotive News reports, this investment also marks a change in strategy for Alphabet. In the past, it invested heavily in Uber. But after the two companies ended up in court over stolen trade secrets, that relationship understandably fractured. Uber may still have a much higher valuation than Lyft, but it has also dealt with more than its fair share of scandals this year. Those scandals led Travis Kalanick, Uber’s CEO at the time, to resign. He was eventually replaced by former Expedia exec, Dara Khosrowshahi.
What Lyft will do with the new money is still up in the air, though. It’s slowly gaining market share in the U.S., but unlike Uber, it doesn’t operate overseas. CapitalG’s investment could be what it needs to try expanding into foreign markets. Then again, it could also reinvest that money stateside in an attempt to enter domestic markets it doesn’t currently serve. About 95 percent of Americans have access to Lyft, up from about 54 percent at the start of 2017.
Back in May, Waymo, Google’s autonomous driving division, announced a partnership with Lyft. The ride-hailing company also has partnerships with GM, Ford, and Jaguar Land Rover.