NEWS
NEWS
NEWS
Report claims Lyft rejected an acquisition offer from GM
Ridesharing service provider Lyft, Inc. rejected an acquisition offer from car maker General Motors , Inc. in the last few weeks, according to a report at the weekend.
According to The Information, Lyft is said to have briefly considered the offer given that it came after their hiring of Qatalyst Partners LP, an investment bank known for helping tech companies find a buyer, and instead decided to pursue a further round of funding.
It’s not known how much General Motors offered for Lyft, however when it invested $500 million in Lyft back in January the valuation on that deal was said to be $5.5 billion; under that deal GM and Lyft agreed to a joint effort to develop an on-demand network of self-driving cars, and GM was to supply Lyft with short-term use of vehicles that drivers can access through rental hubs in cities across the United States.
The report notes that Lyft did not reject GM’s offer until soliciting other potential strategic acquirers.
Difficult times
News that Lyft has rejected a potential takeover offer from General Motors comes following the news at the beginning of August that Didi Chuxing Technology Co. had acquired Uber, Inc.’s business in China, not only putting an end to the price war in that country, but more importantly seeing Uber now taking a minority stake in Didi. Lyft major partner in a global anti-Uber ridesharing alliance that included GrabTaxi Holdings Pte. Ltd., and India’s Ola (ANI Technologies Pvt. Ltd.).
Under that deal, which was still being rolled out at the time of the acquisition, users on each service would be able to book cars from another service using their own app. While the anti-Uber alliance is not officially dead as of yet, its chances of remaining are dim, with Lyft going on the record as saying only that they would be reviewing the alliance going forward.
Without the alliance, Lyft, which is smaller than Uber in the United States, will have no global scale at a time Uber is opening up shop in more and more countries across the globe, making it far more appealing as a service to anyone who travels.
What we do now know is that Lyft is in the process of raising a new round, so expect a form announcement sometime between now and the end of the year.
Image credit: raidokaldma/Flickr/CC by 2.0
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