Speculation is building around a potential sale for ride-sharing company Lyft. In fact, some analysts say it’s “inevitable.”
According to Business Insider, there are a number of signs pointing toward a sale happening in 2017.
One in particular is that for many on-demand businesses, consolidation is always a potential. For the ride-sharing industry, market ownership varies by city and more so by county. While Uber dominates the American market and expands quickly in other countries like India (after losing ground in China) and across Europe, Didi Chuxing — also known as “Didi” — holds China, GrabTaxi leads in SouthEast Asia, and Ola prevails in India.
As a result, as Uber gains strength, the concept of consolidation to cover a larger marketshare may become even more attractive. In fact, collectively many of those apps — Didi, Lyft, Grab, and Ola — have banded together to counter Uber’s growth. According to analysts, all of them seem to value marketshare first over profits. On top of that, there is a higher barrier to enter the market.
However, analysts say the market could be a perfect opportunity for a larger company such as Alibaba or General Motors to swoop in and take up residence. With self-driving cars becoming a very soon “thing of the future” (Google and Apple have already revved their idea generating engines) analysts say Lyft may already be having some quiet conversations from potential backers like Apple, GM, Alibaba and Softbank.
Recently, Lyft hired tech adviser and investment bank Qatalyst for likely fundraising or other advising opporutnities. Qatalyst is most known for brokering deals each involving LinkedIn, Informatica and Twitch.
Lyft has recently raised quite a few bumps of cash. That includes $1 billion in January, and another $2 billion over the next seven years, as well as a Sereies F financing of $4.5 billion.
Analysts say some future investor should include Alibaba Group, Didi, and Kingdom Holding Company, with another potential group others including GM, DSCN Capital, Janus Capital Group, and Olympus Partners.