General Motors (NYSE:GM, TSX: GMM) agreed to invest $500 million in Lyft Inc. as part of a new $1 billion funding round. The two companies also entered into a long-term strategic partnership to create an integrated network of on-demand autonomous vehicles in the U.S. In addition, GM will hold a seat on Lyft’s board of directors.
Lyft said other investors in this funding round, which valued the company at $5.5 billion, included Prince Alwaleed bin Talal’s Kingdom Holding which invested $100 million, Janus Capital Management, Japan’s Rakuten Inc, Chinese ride-sharing company Didi Kuaidi and Chinese Internet giant Alibaba.
Lyft had previously raised about $1 billion from investors including Founders Fund, Andreessen Horowitz, Coatue, Didi Kuaidi, Alibaba and Tencent.
“The new valuation is more than double the $2.5 billion Lyft was valued at in May when it raised $100 million from Carl Icahn,” said Silicon Valley Business Journal TechFlash editor Cromwell Schubarth.
In comparison, San Francisco-based rival Uber, which has raised more than $6 billion and is valued at $51 billion, rivals GM’s market cap of about $53 billion and Ford’s of $56 billion, commented Schubarth. Uber is reportedly in the midst of a new $2 billion+ funding round at an approximate valuation of $65 billion.
“We see the future of personal mobility as connected, seamless and autonomous,” said GM President Dan Ammann. “With GM and Lyft working together, we believe we can successfully implement this vision more rapidly.”
John Zimmer, president and co-founder of Lyft, said: “Working with GM, Lyft will continue to unlock new transportation experiences that bring positive change to our daily lives. Together we will build a better future by redefining traditional car ownership.”
“The joint development of a network of on-demand autonomous vehicles will leverage GM’s deep knowledge of autonomous technology and Lyft’s capabilities in providing a broad choice of ride-sharing services,” said GM in a statement. “Beginning immediately, GM will become a preferred provider of short-term use vehicles to Lyft drivers through rental hubs in various cities in the U.S. Lyft drivers and customers will have access to GM’s wide portfolio of cars and OnStar services. This will create a richer ride-sharing experience for both driver and passenger,” added GM.
General Motors Co. and its partners produce vehicles in 30 countries, and the company has leadership positions in the world’s largest and fastest-growing automotive markets. GM, its subsidiaries and joint venture entities sell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Jiefang, Opel, Vauxhall and Wuling brands.
Lyft was founded in June 2012 by Logan Green and John Zimmer. Lyft is the fastest growing rideshare company in the U.S., according to the company, and is available in more than 190 cities.