Lyft Inc., the US-only competitor to the well-known Uber Technologies Inc., has announced it entered negotiations with new and existing investors to gain $250 million of financing, claim sources close to the matter.
The people that have knowledge of the situation, talking to Bloomberg under condition of anonymity because the talks are not yet of public knowledge, said the new financing round would put Lyft’s value at $2 billion. The San Francisco-based ride-sharing business has already secured a part of the financing, but the negotiations go on over the terms as the deal is not yet finished, they added. Lyft’s revenue and number of rides jumped fivefold in 2014, and the startup has already achieved profitability levels for the already established markets, including San Francisco, according to co-founder John Zimmer.
On the other hand, the company has been fighting its way out of the shadow of larger rival Uber Technologies Inc., which just last month managed to get $1.6 billion in convertible debt and closed a $1.2 billion round of financing that took its market value at $40 billion. Lyft was founded back in 2012 by Zimmer and Logan Green and has established operations in at least 60 US cities, with the new financing round used to further expand, according to the sources. Uber, on the other hand, was started back in 2009 by Travis Kalanick and Garrett Camp and currently operates in 277 cities in 54 countries around the world. Both companies have ride-sharing services via smartphone applications and have disrupted the established market of taxi and limousine operators.