Investor Carl Icahn invested $100 million in Lyft Inc., in attempts to help the quick expansion of the smaller Uber rival.
Lyft, a three-year old startup, has a growing list of backers; such as Andreessen Horowitz, hedge fund Third Point Management, New York-based technology hedge-fund Coatue Management, Chinese e-commerce giant Alibaba (BABA.N), and now Icahn Enterprises, led by American businessman Carl Icahn joins the pool of investors.
Lyft is best known for having their cars don a logo of a pink moustache. The service offered by Lyft echoes that of the vastly popular Uber, both using a smartphone app to match riders with paid drivers who use their own cars to pick up customers.
Though Uber had quickly gained popularity in New York City, the tide started to turn when drivers realized the cost of using their own cars and paying insurance makes the entrepreneurial, be-your-own-boss perk not as glamorous. Also, Uber has a strong global presence, and is a much larger company; working towards expanding into logistics, and currently offering various services including limousine-like rides. Uber is valued at$40 billion compared to Lyft that is only $2.5 billion.
On May 15, Lyft announced that it has raised an additional $150 million, led by an investment of $100 million from Icahn Enterprises L.P. the diversified holding company controlled by Carl Icahn. Jonathan Christodoro, one of Icahn's Managing Directors, will be joining Lyft's Board of Directors as part of the investment.
John Zimmer, President of Lyft, said, "Carl Icahn's record as an investor is unparalleled. His recent success investing in the technology sector stems from a focus on companies that deliver incredible long-term value to their customers, such as Apple, Netflix and eBay/PayPal. We're thrilled to partner with Carl during this exciting period in Lyft's growth as we work to rebuild the U.S. transportation infrastructure and reconnect local communities. With this additional investment, we remain focused on deepening our U.S. footprint, continuing to lead with product innovation and providing the best possible experience for drivers and passengers."
Icahn said, "We are very happy to be investing in Lyft. I believe that ridesharing is poised to become a fundamental component of our transportation infrastructure. The Company's revenue growth to date has been extremely compelling, and increasing urbanization over the next 5 to 10 years should enable the Company to maintain that trajectory. Additionally, I've been very impressed with Lyft's founders and management team, and I believe they are well-suited to take advantage of this opportunity and to make Lyft an extremely successful company."