Credit Stephen Yang for The New York Times
Even as questions swirl over the fund-raising environment for hot young start-ups, the ride-hailing sector is barreling into new funding talks at top speed.
Lyft, the ride-hailing start-up, is seeking to raise new capital, four people briefed on the round said, as Uber, its larger rival, also ramps up conversations with investors about another private fund-raising.
Lyft, which is based in San Francisco, is seeking about $ 500 million at a valuation of approximately $ 4 billion, said the people, who spoke on the condition of anonymity. Thatâs up from the companyâs current valuation of about $ 2.5 billion. The figures are still in flux and may change as fund-raising talks continue, the people said.
Uber is meeting with investors about a new round as well, which is expected to close in December, said other people with knowledge of that round, who also asked not to be named because the details are not yet public. Uber is hoping to raise roughly $ 1 billion at a valuation of $ 60 billion to $ 70 billion, other people told The New York Times in October. The company is currently valued by investors at about $ 50 billion.
Representatives from Lyft and Uber declined to comment on the fund-raising process.
The discussions may become tests of whether high-profile private companies can continue to raise new capital, even as some big names â like Snapchat and Dropbox â have seen their valuations marked down by mutual fund investors. So far, the tempo of fund-raising for technology start-ups has remained brisk, according to CB Insights, a venture investment tracking firm.
Uber, founded in 2009, and Lyft, founded in 2012, helped ignite the ride-sharing craze in the United States, promoting themselves as a superior alternative to owning a car or using public transportation. Uber and Lyft users are able to hail a ride with little more than a few taps of their smartphone.
Users can request private rides or car-pool with others for a reduced rate, and both companies take a cut of each fare, typically 20 to 25 percent.
The phenomenon has exploded in popularity. Uber has become available in more than 300 cities across 65 countries, and it hosts more than 1.1 million drivers on its platform. Lyft operates in more than 190 cities across the United States.
In September, Lyft teamed with Didi Kuaidi, the Chinese ride-hailing behemoth, to provide service to Chinese Didi Kuaidi app users who enter the United States.
Lyft has already raised more than $ 1 billion from investors like the billionaire activist Carl C. Icahn, the venture capital firm Andreessen Horowitz and the hedge fund Coatue Management. Uber has raised more than $ 8 billion and counts Fidelity and Google Ventures among its backers.
At the Robin Hood Investors Conference in New York on Tuesday, Lyft said it expected to generate about $ 1 billion in annualized gross revenue next year, a figure that does not account for the cut of money the drivers take from each transaction.
Lyft also facilitated over seven million rides in October, a record for the company.
Some of Uberâs skyrocketing valuation rests in its potential to be a major player in on-demand food and retail delivery, an area in which start-ups like Postmates and Instacart are trying to compete. Other major players, including Amazon and Alphabetâs Google, are also testing delivery services in a number of cities. Uber is testing its delivery services in several cities, but has not rolled it out widely across the world.
Both Uber and Lyft are also betting the future of their companies on their car-pooling options â UberPool and Lyft Line â in which customers traveling in the same direction share rides. Nearly half the Uber rides taken in San Francisco are shared UberPool rides, the company has said.
For Lyft, that figure tops 60 percent, also in San Francisco, the company announced on Tuesday.
âWe are here to reimagine and reinvent how people use cars,â John Zimmer, president and co-founder of Lyft, said in a speech at the Los Angeles Auto Show on Tuesday. âChange is happening faster than expected, and continues to accelerate.â