Lyft Raises An Additional $150M, Including $100M From Carl Icahn

It may not have the mega-valuation of rival Uber, but ridesharing startup Lyft’s new $150 million extension to its $530 million round from March certainly puts it in the upper stratosphere of startups in terms of perceived value. The new $150 million extension is led by Carl C. Icahn’s Icahn Enterprises, which put up $100 million of the total. It’s an unusual move by Icahn, who generally acts as an activist investor with stakes in high-profile publicly traded companies.

The new deal sees Icahn Managing Director Jonathan Chistodoro join with Lyft’s board of directors. Icahn himself described the logic behind┬áhis company’s big investment in the ridesharing startup as follows:

We are very happy to be investing in Lyft. I believe that ridesharing is poised to become a fundamental component of our transportation infrastructure. The Company’s revenue growth to date has been extremely compelling, and increasing urbanization over the next 5 to 10 years should enable the Company to maintain that trajectory. Additionally, I’ve been very impressed with Lyft’s founders and management team, and I believe they are well-suited to take advantage of this opportunity and to make Lyft an extremely successful company.

Lyft’s valuation was also a key ingredient for Icahn; he told the Wall Street Journal in an interview of his company’s new stake in the ridesharing service that its $2.5 billion valuation looks like a “bargain” relative to Uber’s, which is north of $41 billion.

The round in March brought Lyft’s total valuation to $850 million, but the new injection from this add-on pushes that to an even $1 billion in total money raised. Japanese e-tailer Rakuten led the earlier part of this round, likely a strategic partner for Lyft. Even Lyft’s $1 billion in total funding still trails Uber’s whopping $5 billion plus in money raised.

At this year’s TechCrunch Disrupt NY, Lyft CEO and co-founder Logan Green discussed the company’s recent strategy with Ryan Lawler. He described the overall goal of their current product investment as “going deep rather than going broad,” emphasizing new services like Lyft Line that serve passengers making different kinds of trips.