Lyft raises $1 billion, including $500 million from GM

To celebrate the new year, General Motors has just invested 0 million in Lyft, and the two firms are planning to create an “integrated network of on-demand autonomous vehicles in the U.S”. Today Lyft announced that it is closing on an impressive $1 billion in its latest round of fundraising, with a full half coming from General Motors. GM will use its knowledge of autonomous vehicle technology while Lyft will contribute its ride-sharing expertise.

As for GM, this deal is not only about backing Lyft with cash and a seat on the company’s board. Google, Tesla and Uber are among companies racing to ideal the network of what the industry calls the “autonomous on-demand network of self-driving cars”.

Other investors in this latest funding round for Lyft include Kingdom Holding Company, which put in $100 million, as well as Alibaba, Didi Kuaidi, Janus Capital Management and Rakuten.

The investment brings Lyft’s valuation to about $5.5 billion. Lyft drivers will also be offered a fleet of GM vehicles through rental locations across the US.

For now, the deal means GM cars will be the “preferred” vehicle used by Lyft drivers who rent their cars in various USA cities.

In October, GM CEO Mary Barra stated that the company has no intention of depending on the traditional owner-driver model to further its business.

GM is making a $500 million bet that it can use Lyft’s rideshare technology to provide self-driving cars to customers.

Lyft said Monday that it has closed all of that round.

Though this new partnership between Lyft and General Motors gives the two companies several advantages over other competitors, both now and in the self-driving auto future, the two companies will still have to work incredibly hard to be leaders in the space. “If, you know, you’re heading with your family to Tahoe, you’ll get to order a specific kind of autonomous experience where you get to enjoy movies on your trip or after work you can get a sports Lyft and watch a Clippers game with friends”. Meanwhile, the leader in the space, Uber, is looking to raise another $2.1 billion, Bloomberg News reported last month, citing people familiar with the process.