People familiar with the inner secret corporate relationship between Alphabet Inc (the parent company of Google) and Lyft Inc say the two companies have a close working relationship. However, it might seem that relationship might be tighter or is about to get tighter with rumors of Alphabet possibly investing $1 billion into Lyft.
For Lyft Inc, a financial support injection from one of Silicon Valley’s biggest financial muscle could boost its battles against arch-rival Uber in the ride hailing business. As currently things stand, Lyft Inc comes second place to Uber Technologies Inc in the ride hailing market share.
Although it is not currently clear how large an investment Alphabet is putting into Lyft. Bloomberg cites people privy to the matter that the discussion says a $1 billion deal could be in the offering. Neither Alphabet nor Lyft has come out to deny or refute the figure or that they are in talks on a possible investment.
The two companies have already partnered in the past, through Alphabet self-driving car unit Waymo partnering with Lyft to develop self-dring car technology. There was not much communication from both companies to the public about their partnership then, just like none is forthcoming now.
The investment couldn’t come at a better time for Lyft
In August, Lyft said it is on an expansion drive across 40 U.S. states with a target of covering at least 94% of the country’s population. For Lyft, the financial muscle provided by Alphabet could make this initiative go faster and smoother, compared to if it were to go at it alone.
Back in April, Lyft raised $600 million in fresh funding mainly from large global investment funds. That round of funding valued Lyft at $7.5 billion, up from $5.5 billion from its previous financing, which happened over a year earlier.
The discussed Lyft IPO might not happen
Should Alphabet make the $1 billion investment in Lyft, the ride hailing discussed possible, upcoming initial public offering might be pushed further away. Initially, Lyft planned to issue an IPO most likely in 2018; sources close to the company seems to suggest Lyft did not plan to raise further funding before the IPO.
Alphabet’s long-standing frosty relationship with Uber
Since 2013, Alphabet has been an investor in Uber through its venture capital firm, GV. However, their relationship turned sower after Waymo sued Uber this year for allegedly stealing trade secrets.