Lyft reached a valuation of $7.5 billion following a new round of funding during which the company raised $500 million, sources with knowledge of the matter told Recode. This turn of events marks an important step for the San Francisco-based ride-sharing startup that was so far valued at $5.5 billion, having raised more than $2 billion in funding since being established in 2012 by Logan Green and John Zimmer.
As things stand right now, 2017 could prove to be a successful year for Lyft that recently expanded its services to 100 more cities in the United States and is currently operating in approximately 300 cities in the country. While that number still pales in comparison to Uber — another ride-hailing startup with a similar business model — Lyft has the advantage of a relatively unharmed public image, as the company managed to present itself in a friendlier manner to both customers and investors. Additionally, while being only three years younger than Uber, Lyft was so far focused on relatively sustainable growth, which isn't an approach that's often adopted by U.S. tech startups. However, that strategy may pay off in the long term, especially in light of the fact that Lyft is now slowly setting its sights on an international expansion that already started with its partnership with Didi and China.
The latest round of private funding raised by Lyft will likely be used for both improving the company's existing service and fueling the advancements of its ambitious self-driving program. Much like Uber, Lyft believes its entire fleet will be operated by artificial intelligence (AI) at some point in the future, which is why the company is adamant to develop an in-house autonomous driving solution that it believes will save costs in the long term. Lyft's self-driving efforts are currently sponsored by General Motors and the company's first autonomous vehicles may hit public roads later this year, Zimmer revealed last fall. In a blog post from September 2016, Zimmer boldly predicted the end of personal car ownership by 2021, adding that Lyft intends to spearhead the upcoming self-driving revolution that will see all personal vehicles be replaced by autonomous cars. An update on the company's operations is expected to follow shortly.