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Alphabet’s CapitalG Leads $1B Round in Lyft
- smaili 9y agoFor those wondering about CapitalG: https://www.capitalg.com https://www.capitalg.com > CapitalG (formerly Google Capital) is a growth equity fund backed by Alphabet, Google’s parent company. We invest in companies around the world that drive market disruption by harnessing long-term technology trends.
- tlarkworthy 9y agothat's the finest name
- jgh 9y agoAlthough Trent Reznor may find it a little on the nose.
- plussed_reader 9y agoI would wager it's intentional.
- fenwick67 9y agoThe person who named this group is either really clueless or really clever, I don't know which. "I used to stand for something, I forgot what that could be. There's a lot of me inside you, maybe you're afraid to see"
- GFischer 9y agoI had to Google it... not everyone knows all the music out there :) but they definitely Googled it before settling on that name !
- philsnow 9y agohttps://lowercasecapital.com/ https://lowercasecapital.com/ is my favorite VC fund name
- nerfhammer 9y agoWhat would happen if lower case capital and CapitalG both tried to invest in the same startup?
- flappydev 9y agofor a rap artist
- madamelic 9y agoIt seems like larger and larger rounds are being announced. Magic just also did a $1B round. Is this cause for concern or innocuous? I don't remember rounds being this big before.
- adventured 9y agoIt's not becoming more common. Uber, Didi, WeWork, Airbnb and a select few others have raised rounds that large. These are large businesses. Magic is an outlier in terms of what they're raising vs the size of their business. Those couple top companies have gotten a lot bigger in terms of revenue in the last three or four years. You aren't seeing other companies able to raise a billion dollars like they can. It's best to no longer think of those companies as traditional start-ups, they have more in common with their large publicly traded peers (Airbnb & Priceline for example). So far it appears Magic raised $500m in the round - https://www.reuters.com/article/us-magicleap-funding/startup-magic-leap-raises-half-a-billion-in-new-funding-idUSKBN1CM2VI https://www.reuters.com/article/us-magicleap-funding/startup...
- bartozone 9y agoJust to piggy back on this, many of these companies are skipping IPO's because there's enough private equity to give them the funds they needs. Previously this wasn't the case.
- austenallred 9y ago
- candiodari 9y agoI wonder how Lyft's finances compare with Uber's. Is there any info available publicly ?
- JulianRaphael 9y agoThey claim that they could be profitable in 2018 in this article: https://www.recode.net/2017/10/19/16503628/alphabet-lyft-ride-hail-investment-billion https://www.recode.net/2017/10/19/16503628/alphabet-lyft-rid...
- giarc 9y agoProfitable in their current markets. Once they expand internationally they will need to subsidize heavily.
- gsnedders 9y ago> Profitable in their current markets. Once they expand internationally they will need to subsidize heavily. Why would they need to subsidize outside of the US?
- jtmcmc 9y agoparticularly with a business that relies on network effect the beginning is often not profitable as you need to kickstart people using the system on either side hence signup promos on both sides etc...
- giarc 9y agoMajority of the cities that they expand to will likely have a competing player (Uber, Didi etc). Therefore to attract customers away from the incumbent they will have to offer free rides or discounted rides. That money needs to come from somewhere.
- malandrew 9y agoUber: -8% losses as a percent of gross bookings Lyft: -13.5% losses as a percent of gross bookings This is based on leaked/estimated Q2 2017 financials.
- maxfurman 9y agoThat's the same amount they want Uber to pay Waymo. What a coincidence!
- lobo_tuerto 9y agoWaiting on Lyft to go international and disrupt Uber's hegemony.
- TremendousJudge 9y agoI can't wait to have two 200mb apps on my phone fulfilling the same need instead of one!
- theDoug 9y agoI found out about m.lyft.com and m.uber.com the other day. Both work pretty well, and I hope they save you as much space as they saved me! (Uber's app was 451MB on my phone)
- beal 9y agoMost of my ride sharing has been booked through their integration with google maps app
- philsnow 9y agoalso, the uber app tracks your location while you're not using the app (they say they only do so for ~5 minutes after your drop off, but you have to trust them). whereas you can deny the m.uber.com browser tab the ability to get your location from the browser (caveat: [0]), and you can close the tab when you're in the car. [0] companies can still get rough location information from your mobile IP address [1], because of course that's a revenue stream for all the big mobile carriers. [1] https://www.xda-developers.com/services-grab-location-info-data-privacy/ https://www.xda-developers.com/services-grab-location-info-d...
- woolvalley 9y agoYou know that isnt true anymore with the 5m location thing
- linkregister 9y agoOn iOS this has been changed to “when the app is open” for months.
- jtchang 9y agoCapitalG is such a gangsta name.
- bmmayer1 9y agoIsn't Google also an investor in Uber?
- pm90 9y agoYes, but they don't own it, or have a controlling stake.
- ProAm 9y agoWell there's an investment and a lawsuit so it sort of balances out.
- philsnow 9y agois the latter a hedge against the former? ;)
- gxs 9y agoThese companies generate billions of dollars a year in profit. They, quite literally, have nothing better to do with their money than invest. Interestingly, this is what will make these companies so entrenched for decades to come - anything that would ever come close to being a competitor..they will be part owners of.
- tyleraldrich 9y agoI'm pretty sure they both operate at a loss or at least come very close to breaking even. There is a 0% chance Uber or Lyft make "billions" in _profit_ every year.
- huac 9y agohe means Google
- tyleraldrich 9y agoHah wow my reading comprehension is apparently not working at all today, my bad OP. Gunna just leave my comment up so I can be properly shamed :p
- sidcool 9y agoThat's a billion with a 'B'! Is this a way Google is trying to get back at Uber?
- ghostbrainalpha 9y agoI'd really hope Billions are not being spent on basic pettiness. But these companies are competitors and their long term incentive is not to work together.
- linkregister 9y agoI seriously doubt it. Google does business with its competitors all the time. It pays Apple billions per year to promote its search engine while engaging in proxy lawsuits against Apple. CapitalG also has completely different objectives than Waymo. Larry & Sergey have 51% of Alphabet, but I seriously doubt the board of directors would approve a $1B spend out of spite. The Lyft deal looks to be genuinely good. The Waze Carpool app still has low usage even in the Bay Area. Lyft can supply their network, so Waymo doesn’t have to support every metro area, which is what they would have to do if they just sold self-driving kits to automakers.
- koolba 9y agoAs a customer of ride sharing services that's become accustomed to VC subsidizing my rides, this is great news.
- trhway 9y agoVC (at that scale) are just a pipe for the Fed's cheap money, ie. we all subsidize your rides. Strangely, it does seem to result in overall improvement to the society and economy.
- YuriNiyazov 9y agoCan't tell if you are being sarcastic or not with that "strangely", but yes - public transportation is a net good thing
- chimeracoder 9y ago> Can't tell if you are being sarcastic or not with that "strangely", but yes - public transportation is a net good thing Lyft isn't public transportation, and there was an article a few days ago which demonstrated that, in some cities, Uber and Lyft were causing a net decrease in public transportation use.
- JumpCrisscross 9y ago> Uber and Lyft were causing a net decrease in public transportation use Darned consumer choice getting in the way of multi-billion dollar political handouts again [1]. [1] https://www.utrc2.org/publications/final-second-avenue-subway-case https://www.utrc2.org/publications/final-second-avenue-subwa...
- chimeracoder 9y ago> Darned consumer choice getting in the way of multi-billion dollar political handouts again [1]. I wasn't even advocating public transportation necessarily - just pointing out that Lyft doesn't qualify as public transportation. But, since you're bringing it up, I'll point out that glibly referring to the Second Ave line as a "political handout" is reductive. The Second Ave project is[0] a disaster for a whole lot of reasons, not just "political handouts", and it's also not at all representative of public transportation either in NYC or in general. [0] not was - is... Phase II and III have still not happened
- edshiro 9y agoI wonder what is Alphabet's intent behind this massive investment? Are they planning to use Lyft as a ridesharing platform for their autononous vehicles, since Lyft already has a sizeable market share in the US? For Alphabet, Lyft would be a great partner to sell/rent autonomous vehicles to, given their current legal battle with Uber. For riders, it's great, as prices should remain low. Interested in seeing Softbank's next move. However you may look at it, I just don't believe this is a winner takes all market.
- canes123456 9y agoRead this: https://stratechery.com/2017/the-uber-disaster-round-up-waymo-and-lyft-form-partnership/ https://stratechery.com/2017/the-uber-disaster-round-up-waym... There many links to more information on why it might be winner take all and the upside of Lyft.
- jordonwii 9y agoThat's already started: https://www.nytimes.com/2017/05/14/technology/lyft-waymo-self-driving-cars.html https://www.nytimes.com/2017/05/14/technology/lyft-waymo-sel... Although, while looking for that article, I also found this: https://www.theverge.com/2017/7/21/16005636/lyft-self-driving-car-technology-hardware-software https://www.theverge.com/2017/7/21/16005636/lyft-self-drivin... So I'm not really sure what's going on, now.
- sf_rob 9y agoLooks like Lyft is testing the waters before they pick a direction. They also are working with Ford on what an on demand fleet of Ford self-driving cars would look like: http://www.businessinsider.com/lyft-ford-motor-company-self-driving-partnership-2017-9 http://www.businessinsider.com/lyft-ford-motor-company-self-... Not to mention their historical relationship with GM.
- akyu 9y agoSo much for that "winner take all" narrative.
- mailarchis 9y agoThis is interesting. And about a 4 years back Google Ventures https://www.gv.com https://www.gv.com had invested in Uber Ref : https://techcrunch.com/2013/08/22/google-ventures-puts-258m-into-uber-its-largest-deal-ever/ https://techcrunch.com/2013/08/22/google-ventures-puts-258m-...
- deleted 9y ago[deleted]
- anonymoustrolol 9y agoGoogle is copying GE's playbook. It's fascinating to watch this tech company turn into an investment vehicle.
- skj 9y agoWhat else do you do with 100B in the bank? If they just paid it out to the engineers (yes please, thank you!) half of them would retire after two years.
- jdross 9y agoWell historically when a corporation couldn't reinvest its capital for an above market rate of return, it would either buy back shares or issues dividends so owners/shareholders can reinvest for higher return. Hoarding this much cash is historically unprecedented, largely because it's mostly offshore for tech companies and repatriating it would cost many billions in taxes.
- lucretian 9y agomaybe they should repatriate it and pay their damn taxes.
- Veratyr 9y agoWhy? Why should they pay US tax on money earned abroad? They've paid tax to the local government where sales were made, why does the US get a cut too?
- B1FF_PSUVM 9y agoEnforcement. Getting billions out of intellectual property works better if you have a couple dozen aircraft carriers, etc. to back up the diplomats and trade treaties. "You can get much farther with a kind word and a gun than you can with a kind word alone."
- 9y ago