Taxi app Lyft has raised $530m (£353.6m) from a new funding round, softening the blow dealt by a US judges’ ruling against the ride-sharing service.
Lyft is now valued at more than $2.5bn (£1.67bn) after a funding round led by Japanese e-commerce giant Rakuten closed this week.
Rakuten now owns an 11.9 per cent stake in the company - who currently only operate in the US - after making a $300m investment.
Rakuten’s founder and chief executive Hiroshi Mikitani said: “We have seen the future and this is it. By empowering human connection, the sharing economy is going to fundamentally transform the service industry and benefit society.
“We believe the businesses like Lyft that unlocks the latent potential that exists in people and society hold the key to the future.”
Yet Lyft’s path to unlocking the future has been dealt a setback by a San Francisco federal court’s decision to put a lawsuit against the company to a jury.
Lyft and rival Uber are both subject to separate lawsuits from drivers who claim they should be regarded as employees of the company and not independent contractors.
If a jury comes down in the drivers’ favour, Lyft’s business model will take on a load of new costs which could include reimbursements for drivers’ expenses.
Lyft faces stiff competition from Uber which was valued at $41bn by investors in December. As well as stealing some of its market share in the US, Lyft will look to replicate its inroads into international markets.
With Rakuten’s investment coming after investment from China’s e-commerce kingpin Alibaba, Asia looks set to be the most likely option.