Alphabet's Capital G invests $1B in Lyft

Alphabet's Capital G invests $1B in Lyft

Photo Credit: Google parent company Alphabet has led a $1 billion investment in ridesharing company Lyft.

Waymo, the autonomous-driving subsidiary of Alphabet, in May announced an alliance with Lyft, Uber's main rival.

Both companies are betting the ride-hailing market will continue to expand dramatically and move beyond the largest cities by weaving itself into the transportation fabric of America's heartland. But relations between Uber and Google's parent company have likely soured in general now that Alphabet's Waymo self-driving company is engaged in an ongoing legal battle with Uber over allegedly stolen trade secrets regarding LiDAR tech.

The influx of capital has the potential to further boost Lyft's momentum in the USA while Uber tries to recover from a year full of PR crises, executive changes and legal scrutiny.

The ride-sharing company on Thursday confirmed that CapitalG is leading a $1 billion financing round in Lyft following rumors about the deal last month. GV invested in Uber in 2013, but then Uber began to develop autonomous cars and compete directly with Alphabet. The deal brings Lyft and Alphabet closer together in order to tackle their main rival, Uber, which is now weathering a bit of a storm due to various scandals.

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The funding brings Lyft's post-money valuation to $11 billion.

Reuters in September reported investment talks between the companies.

CapitalG partner David Lawee will join Lyft's board as part of the deal.

Alphabet's GV early investment fund invested early in Uber, which makes this more interesting.

Alphabet, which is based in Mountain View, California, has also emerged as a thorn in Uber's side, even though Google was among Uber's early investors and still holds a stake in the company. This year, the two companies have faced off in court over allegations Uber used self-driving vehicle technology stolen by a former Google employee. Last year, Alphabet executive David Drummond stepped down from the Uber board as the relationship soiled.

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