In the battle to secure more market share in the U.S. ride-sharing market, the battle between Uber and Lyft has always left the latter of those two companies trailing.
However, Lyft’s latest funding bid may help give it the needed boost to drive home a new plan to gain more prominence in the up-and-coming industry that’s gained so much attention in the past year alone.
Bloomberg Business reported Monday (Dec. 21) that Lyft had filed documents indicating it had given the nod to a maximum of $1 billion in preferred shares. Assuming that Lyft is able to close out the funding round, which Bloomberg noted these types of filings usually indicate, it could see its overall valuation soar to $5.75 billion.
So, what does this mean in Lyft’s fight against Uber’s empire? As Quartz noted, Uber has already raised at least $1 billion in six rounds of funding since June 2014, and it’s currently on the hunt to complete a whopper of a $2.1 billion round as well. With a projected valuation of $62.5 billion, Uber most likely isn’t shaking in its boots at the news of another Lyft funding round, but that also begs the questions of why Lyft is sticking in the seemingly unwinnable fight at all and what investors would look at these numbers and see an opportunity for profit.
The answers to both might lie overseas. Lyft recently announced partnerships with several of China’s largest ride-hailing services, and with the country only just now opening its borders to Western companies like Lyft and Uber, the impetus and reasoning for $1 billion in funding could be tied to quickly and efficiently establishing operations in a major country that Uber has yet to assimilate into its collective.
Lyft kept mum about the funding reports, but if the news is true and the company manages to secure the capital, China could be the proving grounds for an international proxy battle for global ride-hailing supremacy.