Alphabet just backed Lyft, a US rival to Uber, in a $1bn funding round

Lynsey Barber
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Lyft At Its San Francisco Headquarters Showcasing Lyft Cars, The Glowstache, The Lyft App, Lyft Passengers And Drivers
Lyft operates only in the US at the moment (Source: Getty)

Alphabet has led a $1bn investment in ride-hailing app Lyft, even though it's also an investor in its rival Uber.

The massive fundraising comes from the tech giant's growth investment fund CapitalG and the fresh cash puts Lyft's valuation at $11bn. Google Ventures was an early backer of Uber.

Read more: SoftBank IS interested in investing in Uber... or its rival

Lyft has been handed a boost as a result of Uber's annus horribilis and is reportedly exploring expansion plans outside the US for the first time.

"2017 has been an important year for the Lyft community. Earlier this month, we completed our 500 millionth ride and our service is now available to 95 per cent of the US population - up from 54 per cent at the beginning of the year," the company said in a blog post.

"While we’ve made progress towards our vision, we’re most excited about what lies ahead. The fact remains that less than 0.5 per cent of miles travelled in the US happen on rideshare networks. This creates a huge opportunity to best serve our cities’ economic, environmental, and social futures."

It is also moving into driverless car technology, an area where Alphabet boasts one of the strongest pedigrees.

Read more: Jaguar Land Rover has invested in Lyft

Japan's Softbank had been considering an investment in Lyft, which counts car makers such as General Motors and Jaguar Land Rover among existing backers.

CapitalG partner David Lawee will join the board of Lyft, which already raised $600m earlier this year at a $7.5bn valuation.

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