Google’s Parent Company Injects $1Billion in Lyft

The battle for dominance in the ride hailing service sphere has just gotten a lot more complex as Alphabet, the parent company of Google, is injecting  a whooping $1 billion investment round in Lyft.

This was disclosed by the two companies on Thursday. Lyft announced it had just raised $1 billion from CapitalG, the growth investment arm of Google’s parent company Alphabet. The new round raises the ride-hailing company’s valuation to $11 billion, according to Lyft up from a $7.5 billion valuation in April.

Despite the surge in Lyft’s capital, it remains a distant second to Uber, both in terms of market share and valuation. Uber, by comparison, was last valued at $70 billion. It’s also close to raising what could be more than $1 billion from SoftBank (SFTBF), a Japanese conglomerate.

The inflow of capital has the potential to further enhance Lyft’s momentum in the U.S. while Uber tries to recover from a year full of PR crises, executive changes and legal scrutiny.

As part of the deal, David Lawee, a partner at CapitalG, will join Lyft’s board.

In a statement released, Lawee said, “CapitalG is honored to work with Lyft’s compelling founders and strong leadership team.

“Ridesharing is still in its early days and we look forward to seeing Lyft continue its impressive growth.”

It is also worth knowing that Google had previously invested in Lyft’s chief rival, Uber. In 2013, it invested $258 million in Uber through a different venture capital arm called Google Ventures, which was later rebranded under Alphabet as GV.

Google served as an early and powerful ally for Uber by investing a large sum, getting one of its top execs on the startup’s board and promoting the app in Google Maps.

However, the relationship began to crumble as Uber invested in self-driving cars, a key area of interest for Google, and Google began to experiment with ride-sharing, Uber’s most lucrative area.

In February, Google’s self-driving car spin-off, Waymo, sued Uber for allegedly stealing its intellectual property and using it to get ahead in the race towards autonomous cars.

Sequel to this, David Drummond an SVP at Alphabet, left Uber’s board in 2016 citing “the overlap between the two companies.”

This eventually lead to the courtship between Waymo and Lyft.

In May, the two announced they’ll be working together on a pilot project, which is likely to launch in Arizona later this year. Aside from working with Waymo, Lyft was the only ride-hailing service name checked in Alphabet’s Sidewalk Labs Toronto project this week.

Even before the investment, Google had begun to align itself with Lyft. Waymo, Alphabet’s self-driving car division, has been working with Lyft on an autonomous car pilot program.