Lyft’s pink mustaches are smiling brighter this morning.
Today, the on-demand car service announced it closed a $250 million Series D round of financing, led by Coatue Management. The funding total is higher than previously reported–roughly on par with the amount Uber, its main competitor, raised last summer–and will help Lyft attract new drivers and expand to new domestic and international markets. “We’re growing so quickly,” says Lyft cofounder John Zimmer, adding that the next step for the company is to build a “world-class brand.”
Since launching its peer-to-peer service roughly 18 months ago, Lyft has become one of the most compelling players in the ride-sharing space. The service is a part of the sharing economy, and allows anyone with a driver’s license and car to apply to become a Lyft driver; if they pass Lyft’s vetting process, they can earn cash by ferrying passengers around cities that include Los Angeles and San Francisco, where the company is based. Uber, also based in the Bay Area, offers a similar service called UberX.
The two upstarts are currently vying for market share in a slew of locations, with Uber aggressively setting the pace of competition in its race to beat Lyft. Uber has dramatically cut fare costs in a bid to attract more passengers and offered lucrative promotions to drivers willing to switch over to Uber; one recent advertisement in New York City guaranteed drivers $5,000 in their first month with Uber. Uber’s service is available in cities around the globe, from Paris to Tokyo to Moscow.
But with its new round of funding, Zimmer says Lyft will be able to compete with comparable vigor, especially overseas. “A lot of the capital is used to spark markets–getting a certain critical mass of both drivers and passengers,” explains Zimmer, adding that the China-based Alibaba Group, which joined in the round, “will help us better access international markets.” Lyft is currently in 30 markets, and Zimmer says the service is surging in popularity in cities like Los Angeles and Nashville, even faster than it grew in San Francisco.
When asked how Lyft plans to keep up with Uber, which has engaged in incredibly aggressive (some would say dirty) tactics to gain market share, Zimmer says Lyft has been “aggressive in our own ways,” but in ways that remain “true to our values.” He feels the personal, friendly culture of Lyft and its sharing economy-based model will continue to distinguish the service from rivals.
“Lyft is your friend with a car versus everyone’s private driver,” Zimmer says, reciting the taglines of the two brands. “We intend to make sure our model wins.”