Ride-hailing startup Lyft has closed $530 million in new funding led by Japanese e-commerce giant Rakuten, TechCrunch has learned. The new financing, which is slated to be announced tomorrow (now official), brings total cash raised to more than $850 million since being founded and values the company at $2.5 billion.
Rakuten contributed $300 million of the Series E round and acquiring an 11.9 percent stake in the company. It’s not clear who else is participating, but previous investors in Lyft include Coatue Management, Alibaba, Daniel Loeb’s Third Point, Andreessen Horowitz, Founders Fund, and Mayfield Ventures.
The financing is more than double the amount Lyft was reported to have been raising about a month ago, and at a richer valuation than was previously reported. But it speaks to investor interest in the company as well as Lyft’s ambitions to become a global transportation brand.
To date Lyft has only been available in the U.S., but having a strategic investor like Rakuten on board could help the company launch its service into new markets both domestically and overseas.
It’ll need that help to compete with arch-rival Uber, which has raised $5 billion in debt and equity financing since being founded in 2010 and is currently valued at $40 billion. Lyft is currently live in about 60 markets, compared to the more than 250 in which Uber operates.
In preparation for its expansion push, Lyft has made a series of key executive hires and has repositioned its overall brand strategy. Its hires include bringing on board new CFO Brian Roberts and new CMO Kira Wampler, as well as a series of VPs to round out its engineering, design, and partnership ranks.
To court new users, its new branding initiative includes doing away with the bulky, furry mustaches drivers would affix to the front of their cars and introducing a new, more portable “glowstache” so passengers know they’re getting into a Lyft. It’s also shedding some of its old traditions — like instructing drivers to fist bump passengers and asking passengers to sit up front. The hope is to make Lyft more accessible to a broader audience of users.
Lyft competes with Uber not just in finding new users, but in recruiting drivers. On that front, the company has added a series of driver rewards — like discounts on car expenses, as well as health, entertainment, and wellness services — all aimed at making working for Lyft a little more attractive to drivers.
Still, the company has a long road ahead. Though it claims to be profitable in many of its more established markets, expansion is expensive and Lyft will need as much capital as it can get to truly become a global player.
Correction: An earlier version of this story stated that Lyft was valued at $3 billion, not $2.5 billion.