Report: Lyft in talks to raise $250 million at $2 billion valuation

Lyft is catching up with Uber.

Well, almost.

Lyft is said to be in talks with investors to raise a $250 million funding round, which would value the ride-hailing app company at $2 billion, as the New York Times reported Friday. Depending on investor interest, Lyft could seek to raise up to $500 million, according to the report.

The San Francisco company, which grew fivefold last year, also raised $250 million in the second quarter of 2014 — which ranked as the fifth-largest VC deal in a record-smashing year for investing. That round valued Lyft at an estimated $850 million — just shy of the billion-dollar club.

By comparison, Uber raised two $1.2 billion rounds last year for a total $2.4 billion in investments, a sum VCs said they had never before seen for a tech startup. Uber is now valued at $41 billion and is widely expected to file an initial-public offering this year.

While Uber drove to the front of the ride-hailing service market last year, Lyft managed to hold its own, expanding to cities in 29 states, where it has pushed through regulatory reform. In 2014, Lyft led in market share in San Francisco, the largest market for ride-hailing in the country, CEO Logan Green said. And Lyft’s rollout of its carpool feature, Lyft Line, has been a rousing success. About one-third of all its rides in San Francisco now come through Lyft Line, which allows passengers traveling to nearby destinations to share a ride, cutting down the cost for each passenger. However, some drivers have complained that the cheaper rides cuts into their pay.

Photo: In this Jan. 4, 2013 file photo, a Lyft passenger gets into a car in San Francisco. By Jeff Chiu/AP photo.

 

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