The name Uber is virtually synonymous with ride-sharing, but that doesn’t mean the company doesn’t have fierce competition. Most notably, Lyft is creeping into new markets, reaching profitability in many of them—and, most importantly, raking in a ton of cash.
Today, Lyft announced a $530 million round of new funding, which puts the company at a valuation of $2.5 billion, according to The New York Times. That’s a mere fraction of Uber’s $40 billion valuation, but a sign that Lyft is growing fast nevertheless, and may soon start gaining on its gigantic rival.
The majority of Lyft’s fresh pile of money comes from Japanese e-commerce company Rakuten, which contributed $300 million. Both Uber and Lyft have been fundraising recently, and according to The Wall Street Journal, took the extraordinary step of asking that their investors formally agree not to fund their competitor for a set period of time.
The funding comes at a time when the market for the taxi-disrupting ride-sharing is exploding around the world, often facing legal challenges and other growing pains. As the front-runner in this space, Uber has weathered the brunt of the legal and PR headaches, including protests from disgruntled drivers and bans in various markets.
Lyft recently scored a major coup by becoming the official ride-sharing partner of SXSW and striking a deal with the City of Austin that allows them to operate at the Austin-Bergstrom Airport, something Uber won’t be permitted to do. At the same time, though, Uber got first crack at making an app for the Apple Watch. We’ll see what an extra $530 million can help Lyft do next.