Lyft is getting a funding boost.
The ride-sharing service announced late Wednesday that it has raised $530 million in a Series E funding round led by Rakuten, a Japanese ecommerce company, giving Lyft a valuation of about $2.5 billion.
With the additional funding, Lyft plans to double down on the U.S. market by expanding into new cities and investing more in Lyft Line, a carpooling option available in select regions. Those efforts will only continue to put Lyft in competition with Uber, which has a strong presence in many U.S. cities and now operates a similar carpooling service called UberPool.
Unlike Uber, however, Lyft appears to be holding off from talking up international expansion efforts. Even in private conversations, top execs at Lyft remain vague on whether and how the company might break into Europe and Asia, two markets that have been a growing focus for Uber of late.
International is presumably on the roadmap, though. Rakuten, which invested $300 million in Lyft as part of the round, said in a separate release that “the funding will allow Lyft to continue growing its service and invest in both domestic and overseas expansion.”
It is a testament to just how money is being pumped into the taxi startup sector that Lyft’s latest funding amount, large by almost any standard, sounds somewhat unremarkable now. Didi Dache, a Chinese taxi app, raised $700 million in funding last year and Uber has raised multiple billion-dollar financing rounds, most recently at an eye-popping valuation of $40 billion.
Rumors of a new Lyft funding kicked up in January, with one report suggesting the company’s fundraising efforts could be handicapped by Uber, which had lured in some of the bigger investors Lyft might otherwise turn to for a large round.
While Uber and Lyft may typically get lumped together in the media, execs at the latter like to stress the cultural and strategy differences between the two.
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