Lyft raised $1 billion in financing as part of a round led by Alphabet's venture capital arm CapitalG, the ride-hailing service provider said on Thursday. The additional resources secured by the San Francisco, California-based firm put its valuation at $11 billion, with the investment coming alongside CapitalG Partner David Lawee who's now set to join Lyft's Board of Directors. Mr. Lawee is former Google Vice President of Corporate Development and VP of Marketing with a plethora of experience with corporate mergers and acquisitions. Lyft described the new turn of events as the latest step in its endeavor to continue growing and improving its ride-hailing platform which recently celebrated 500 million completed rides and is now available in the majority of the United States after covering only 54 percent of the country at the turn of the year.
Lyft's latest efforts suggest that the company will be able to run a fully nationwide business come 2018, with its new funding from Alphabet presumably being set to back its operational costs, particularly those related to advertising its service and incentivizing consumers to use it with various partnerships and deals. Such promotional efforts are often worthy investments but can quickly ramp up a startup's short-term expenses, with some industry sources recently saying that this is precisely why Lyft has now sought to raise even more funds. Reports of Alphabet investing in Lyft have been circulating the industry for over a month and the two have supposedly been negotiating on the matter since this summer. Alphabet's flagship subsidiary Google is also a minor investor in Lyft's main rival Uber but the Mountain View, California-based company is apparently seeking to diversify its portfolio as much as possible even if such efforts lead it to bet on multiple opposing sides and especially when it falls out with one of its previous beneficiaries like it did with Uber.
For the time being, Lyft will continue funding its expansion using the same strategy it's been pursuing so far but it remains unclear how long will the company take until it sets its sights overseas and starts a foreign expansion. The startup has reportedly considered London as a potential market even before Uber lost its license to operate in the capital of the United Kingdom but will presumably remain focused on the U.S. until it covers the entirety of its home country.