Uber competitor Lyft has received a $500 million investment from General Motors that now values the company at approximately $5.5 billion. According to a statement from GM, the two companies will work together as part of a long-term strategic alliance to create an integrated network of on-demand vehicles. The investment by GM may appear out of character but it indicative of the growing relevance of companies which are part of the sharing economy.
“Working with GM, Lyft will continue to unlock new transportation experiences that bring positive change to our daily lives. Together we will build a better future by redefining traditional car ownership,” commented John Zimmer, co-founder of Lyft.
GM President Dan Ammann stated they see a future of personal mobility that is “connected, seamless and autonomous.”
Beginning immediately, GM will become a preferred provider of short-term use vehicles to Lyft drivers through rental hubs in various cities in the U.S. Lyft drivers and customers will have access to GM’s portfolio of cars and OnStar services. The partnership is expected to create a richer ride-sharing experience for both driver and passenger.
Lyft was valued at $2.5 billion just last March. There was a brief entry point for more investors as equity crowdfunding platform Waverley offered 25,587 shares via a fund in May of 2015.
Opportunities like Lyft and Uber have been fuel to the debate regarding the definition of an accredited investor. The current definition bars smaller investors due to wealth barriers which do not take into account investor sophistication. An investor who took advantage of the AngelList offer to invest in Uber back in 2010 would have made significant capital gains. A $10,000 investment in Uber would now be worth approximately $127 million today.
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