On-Demand Ride-Sharing Startup Lyft Is Raising Another Big Round Of Funding
We’ve heard Lyft has pitched a number of venture firms and late-stage institutional investors, but hedge fund Coatue Management seems to be in the lead for the deal. Coatue has recently invested in hot companies like Box, Snapchat, and HotelTonight, and is part of a growing trend of hedge funds making bets on later-stage startups with traction.
Andreessen Horowitz, which led Lyft’s $60 million Series C round, is also expected to contribute a large chunk of cash. Other investors in Lyft include Founders Fund, Floodgate, Mayfield Fund, K9 Ventures, Ooga Labs, fbFund, and Keith Rabois.
The company was founded as Zimride back in 2007, but it wasn’t until 2012 — when it shifted from long-range to on-demand ride-sharing — that things began to really take off.
With the launch of the Lyft mobile application, it broke new ground in enabling passengers to get rides from other people with a car and spare time on their hands. Due to the success of the on-demand platform, the company rebranded as Lyft and sold its legacy Zimride assets to Enterprise Holdings last summer.
After its initial stint in San Francisco, Lyft began expanding to other cities early last year and now is offering service in 20 markets throughout the U.S. But like Uber, which also offers on-demand rides via mobile app, Lyft has plans to aggressively increase the number of international cities that it operates in beginning this year.
The additional funding will be vital to getting it on the right track toward that goal, as it bulks up operations both in its San Francisco headquarters and in remote offices around the world.
In the meantime, Lyft is trying to get more regulators and local officials comfortable with the idea of letting unlicensed drivers give rides to passengers around town. To that end, it recently hired Google X legal director David Estrada as its VP of government relations.
The company also announced the creation of a peer-to-peer rideshare insurance coalitionthat includes other transportation companies, as well as regulators and insurance providers, to figure out the tricky issue of insurance for its drivers.
Lyft, Coatue, and Andreessen Horowitz all declined to comment.
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