Ride-hailing service Lyft says Icahn makes $100M investment

Carl Icahn is joining the parade of investors in startups, hitching a $100 million ride with the ride-hailing service Lyft.

The billionaire activist investor is known for tangling with corporate boards, sometimes launching proxy fights and pushing companies to make big changes or sell themselves. He's less well known for investing in startups, but that's become one of the hottest areas in the market. Venture capitalists poured more than $48 billion into startups last year, the most since the dot-com bubble burst.

Icahn owns stakes in Apple, Yahoo, Netflix, Hertz, Gannett and eBay, among many other publicly traded companies.

Users download Lyft's app and use it to book a ride from a nearby driver, and they can also use the app to pay for their rides. In March, the company raised $530 million and valued itself at $2.5 billion. The privately held company said Friday it brought in $150 million in the new round of fundraising including Icahn's investment.

Lyft was launched in 2012 and touts its friendly drivers and an alternative image: In its early days its cars were marked with huge, pink, fuzzy mustaches strapped to the front bumper. This year the company adopted a more modest version of the mustache that sits on the dashboard of the car instead of its exterior.

The company says it operates in about 65 cities including New York, San Francisco and Washington DC. In the fall it rolled out a new service, Lyft Line, that matches up travelers with similar destinations so they can share a ride and save money.

Icahn said in a statement that he believes ride-sharing will become a key part of transportation infrastructure in the U.S. He also praised Lyft's revenue growth and its management. Jonathan Christodoro, a managing director of Icahn Enterprises, will join the San Francisco company's board of directors. Lyft didn't comment on any other terms in the investment.

Lyft rival Uber Technologies says it is active in 58 countries, and it's valued at more than $40 billion.

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Citation: Ride-hailing service Lyft says Icahn makes $100M investment (2015, May 15) retrieved 21 June 2024 from https://phys.org/news/2015-05-ride-sharing-lyft-icahn-100m-investment.html
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