While Uber is currently caught in a whirlwind of controversy, its American arch-nemesis and second largest ride-hailing giant Lyft is planning to add fresh capital to its coffers. The company has already initiated talks with investors and is looking to raise around $500 million, reports Wall Street Journal.
For this fundraising round, Lyft is eyeing the valuation of at least $6 billion, say sources aware of the development. The said valuation is just a tad bit higher as compared to the previous $5.5 billion when it last raised capital from General Motors. In addition, one of the sources is of the opinion that its valuation can go as high as $7 billion. Maybe this time around Lyft will be able to add fresh capital after last year’s failed acquisition attempt.
A funding round at this instant could be extremely beneficial for the company due to two important factors. First, cab aggregators are known to rapidly burn through their capital in order to expand and provide discounts. And Lyft just recently made heavy investments into its expansion to 54 new locations in the United States. The second reason is always apparent — Uber. And the timing is also right time around.
This development comes when Lyft’s competitor is badly stuck amid a PR nightmare, that instead of coming to an end is just piling on with even more revelations each day. Uber is currently being questioned about its integrity on multiple fronts, starting with the sexual harassment allegations by a former employee, patent infringement lawsuit from Alphabet’s self-driving arm Waymo, and CEO Travis Kalanick’s attitude towards the drivers.
All this is further topped off by the #DeleteUber campaign, which pops up every time something new about Uber makes headlines. The said campaign which started against Kalanick for being on Trump’s advisory council during the immigration ban (since left the post) is still continuing till date. More than 200,000 users have already deleted the app and those willing to delete the app are receiving emails saying Uber is “deeply hurting” by this action of theirs. Lyft, on the other hand, has skyrocketed to the seventh spot on the App Store.