Amidst the heated cab-hailing war between Uber and rest of the cab services, here’s a shocker. Lyft has is reportedly availing the services of M&A firm Qatalyst Partners to facilitate its suspected acquisition.
According to WSJ reports, Qatalyst Partners, a renowned merger and acquisition firm in the tech ecosystem could be helping Lyft in two ways. It suggests that the cab-hailing service might be in the market to gobble up more money from investors or an outright acquisition. Frank Quattrone, Qatalyst’s founder and executive chairman has been in contact with various companies, including large automakers to acquire a stake in Lyft.
It wouldn’t be surprising to consider that Uber’s US rival might be trying to raise another round of funding after its recent $1 Billion funding round in the beginning of this year. All other cab-hailing services, including Uber and Didi Chuxing in China have raised humongous amounts of cash to expand operations and cover as much ground as possible.
Uber has since then filled its war chest with another $3.5 billion investment from Saudi Arabia’s Public Investment Fund. It has also made bold statement saying that it will soon be the top taxi-aggregator in the world, including China. While on the other hand, its biggest rival — Didi Chuxing — has been able to attract even more investor attention and raised over $7 billion in its latest round of funding.
So, Lyft getting a little(or a lot!?) agitated and reaching out for help from someone is truly justified. Even though it’s gaining share on Uber in all the top markets in the United States, it still doesn’t have enough funds to aggressively invest in expansion and marketing strategies.
But, we also need to consider the rumors that Lyft might also be in the market for a full-blown acquisition. And if that’s the case, it means that it might be time for Uber to be the sole ruler of the cab-hailing market in the U.S. Once Lyft is acquired and shuttered, it will be the only cab-hailing service to prevail in the streets of U.S
It’s not only Lyft that has felt agitated by the rise of Uber in every part of the country. Didi Chuxing, which had been operating for four years in China also felt the heat when Uber entered China and started taking over their market share.
In a bid to outrun Uber, Lyft had previously announced a strategic partnership With Didi Chuxing, where-in the riders could use the Lyft app to share Didi cabs in China. It also gobbled up another $100 million at that time to aid expansion of fleet and its services.
In addition to all this, Lyft has also partnered with automobile maker General Motors to work on autonomous cabs. It also picked up a 10 per cent stake in Lyft, courtesy of the $500 million investment in January. GM saw the deal as an opportunity to jump in on the whole cab-hailing business, which has been proving to be more lucrative than anyone previously imagined.
So if you think hard and focus on the situation at hand, then GM could be one of the top contenders in line to acquire Lyft or pump more money into it.