As Uber’s PR nightmare continues, competitor Lyft is looking for investors.
Sources told the Wall Street Journal that the ride-hailing company is looking to raise $500 million and hopes for a valuation between $6 billion and $7 billion.
Lyft has hired Qatalyst Partners LP, best known for helping tech companies in their search for investors. The second biggest ride company, behind rival Uber, could be the first of the two to become profitable.
Rival Uber has recently been mired in controversy. Notable instances include a recent video showing CEO, Travis Kalanick, arguing with his Uber driver, an extensive probe into allegations of sexual harassment, and a lawsuit involving Alphabet’s Waymo car company.
Uber and other notable taxi service Didi have recently raised funds themselves limiting Lyft in it’s search for potential investors. Uber is currently valued at $70 billion and Didi is valued at roughly $35 billion following a merger with Uber’s China division in August.
In 2016 Lyft raised $1 billion from general motors. However, The Information reported that despite generating $700 million in revenue last year, the company actually lost $600 million.
In the past Lyft has accumulated $2 billion from investors such as Andreessen Horowitz, Floodgate and Carl Icahn’s investment team. Uber, on the other hand, managed to accrue an impressive $13 billion from investors.
Uber holds an advantage based purely on the fact that it is a global company whereas Lyft operates exclusively in the US. The fierce rivalry between the two has resulted in neither being profitable. Both companies rely on private investment to remain profitable due to their need to lower prices in order to be seen as a more attractive option over the other.
It has also been rumoured that the ride-haling company has been researching IPO opportunities, but has not yet made a decision.