Lyft Gets $100 Million Endorsement From Carl Icahn

(Los Angeles Times/TNS) -

Billionaire activist investor Carl Icahn has bought a $100 million stake in Lyft Inc., the on-demand ridesharing service that’s trying to gain ground on larger rival Uber Technologies Inc., Lyft said Friday.

The investment in a privately held startup such as San Francisco-based Lyft is unusual for the 79-year-old Icahn, whose net worth is $22.4 billion, according to Forbes.

Icahn has spent his career, and made his fortune, buying large stakes in publicly traded companies such as Apple Inc. and eBay Inc. and then pressing their managements to make changes that would lift their stock prices.

But in a statement Friday, Icahn said he invested in three-year-old Lyft because “I believe that ride-sharing is poised to become a fundamental component of our transportation infrastructure.”

Lyft said it was “thrilled to partner with Carl during this exciting period in Lyft’s growth.”

Media reports also said Jonathan Christodoro, one of Icahn’s managing directors, would join Lyft’s board of directors.

Lyft operates in about 65 U.S. cities and metropolitan areas. Uber has expanded to more than 250 U.S. and international cities.

In March, Lyft also raised $530 million in a round of funding that was led by the Japanese e-commerce company Rakuten Inc.

Lyft said Icahn’s stake was part of an overall $150 million that it raised in its latest round of funding. The company did not say who contributed the other $50 million.

When Rakuten bought its 11.9 percent stake in Lyft for $300 million in March, it gave Lyft an overall valuation of $2.5 billion.

Rival Uber most recently carried a valuation of $41 billion. But The Wall Street Journal reported early this month that Uber planned to raise an additional $1.5 billion to $2 billion in new funding, which would lift its valuation to an eye-popping $50 billion.