Alphabet — Google’s parent company — was one of Uber’s first big investors. Now it’s putting a big chunk of money into Uber’s chief U.S. rival, Lyft, leading a $1 billion financing round in the ride-hail company via its growth investment arm, CapitalG.
The deal brings Lyft’s valuation to $11 billion; it was last valued at $7.5 billion in April, and has now raised a total of $3.6 billion. As part of the investment, CapitalG partner David Lawee will join Lyft’s now 10-person board.
Alphabet’s investment in Lyft wasn’t a question of necessity for the five-year-old ride-hail player, sources say. The company, which recently gave its 500 millionth ride, has previously said it’s on track to be profitable by 2018. The company also saw a flurry of interest from automakers in investing in the company, several sources told Recode.
The company declined to comment on other participants in the round.
It’s a significant move, both in its sum and because of Alphabet’s previous investment in Uber, through a separate investment arm, Google Ventures. Importantly, that relationship has since deteriorated — and Alphabet is embroiled in an unusual and messy legal fight with Uber — after a series of conversations about working together on self-driving cars fell apart. David Drummond, Alphabet’s chief legal officer, eventually stepped off Uber’s board.
Now, Lyft is working with Alphabet’s self-driving arm, Waymo, to develop what will likely be an on-demand network of driverless cars.
Adding to the intrigue and complexity of the situation is Lyft’s relationship with General Motors. The automaker, which invested $500 million in Lyft, is also working on its own self-driving cars, and to that end, acquired a Waymo competitor, Cruise. General Motors president Dan Ammann also sits on Lyft’s board.
While the relationship hasn’t necessarily deteriorated in the same way Uber and Alphabet’s has, Lyft and GM are certainly not as dependent on each other as the companies initially thought they would be. Both Lyft and GM have kept their options open in terms of which companies to partner with in the self-driving ecosystem.
That’s partly because Lyft was not given as much control over the in-car experience as the companies initially thought would be possible, several sources told Recode. After GM acquired Cruise, the automaker’s priorities shifted and Lyft lost a bit of its leverage in the relationship, people familiar with the matter said.
Alphabet’s investment in and working relationship with Lyft solidifies that. GM, for its part, is building out its own ride-hail app in parallel to its self-driving software development.
Born out of that initial, exploratory relationship was Lyft’s new self-driving strategy. The company now has partnered with several automakers and self-driving software developers. Lyft is also developing its own self-driving software, in part, to maintain its leverage in the autonomous ecosystem.
Beyond self-driving, Lyft has seen considerable growth in its traditional business — thanks in small part to Uber’s tumultuous year. The company is seeing 1 million rides a day on its platform and expanded into 100 new cities by the first half of this year.
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This article originally appeared on Recode.net.