(Reuters) – Lyft, the ridesharing service known for cars sporting fluffy pink moustaches, said it has raised another $250 million, making it one of Silicon Valley’s most richly valued private companies.
The service, which uses a smartphone-based app to match riders with paid drivers who use their own cars rather than livery vehicles, said it would use the cash to expand domestically and internationally. Currently, it works in 28 U.S. cities, with plans to expand to two more by week’s end: Tampa, Florida, and Tucson, Arizona.
“The focus here was on growth without capital being a constraint,” said Lyft president and co-founder John Zimmer, who added that taking more venture funds “made more sense” than an initial public offering at Lyft’s stage of development.
San Francisco-based Lyft, which Zimmer and Logan Green started in 2007, had raised $82.5 million before its latest funding round. Now it has raised $332.5 million.
While the company declined to disclose a valuation, its numbers put it in line with other private consumer-Internet companies valued above $1 billion.
Online home-goods retailer Wayfair has raised around $358 million over the years, with investors valuing it around $2 billion at its last funding round. Accommodation service Airbnb has raised around $325 million, for a valuation of $2.5 billion.
Uber, which runs a low-cost UberX ridesharing service alongside a pricier town car service, has raised $410 million for a valuation around $3.8 billion.
Coatue Management, the New York-based technology hedge fund that has recently moved into Silicon Valley, led Lyft’s newest funding round. Alibaba, the Chinese Internet company that has filed for a U.S. IPO, joined the round, as did hedge fund Third Point Management.
Existing investors Andreessen Horowitz, Founders Fund and Mayfield also participated.
The ridesharing companies have come under the spotlight in recent months after accidents led to questions about when drivers’ individual insurance policies apply and when the ridesharing companies’ policies kick in. Some insurers say that if nonprofessional drivers use their cars for ridesharing, they are violating their personal insurance policies.
Zimmer said ongoing industry talks with insurance companies would likely result in some insurers changing the language in their policies in coming months to allow ridesharing. He declined to name specific insurance companies.
(Reporting by Sarah McBride; Editing by Mohammad Zargham)
Photo: A car fitted out with the distinctive emblem of the ridesharing service Lyft waits for a customer. Photo by Lucy Nicholson for Reuters. All rights reserved.