Alibaba Group Holding, an online-shopping powerhouse in China, is
using some of its cash to buy its way into Silicon Valley. Alibaba's
latest target is Lyft. The Chinese company kicked money into a $250
million funding round for the ride-sharing app developer, Lyft announced
today.
The backing of pink-mustachioed cars comes just two weeks after Alibaba led a $280 million investment in TangoMe,
a messaging app company based in Mountain View, California. In October,
Alibaba led a $206 million investment in ShopRunner, a subscription
service similar to Amazon Prime that offers two-day shipping from major
U.S. retailers, as well as a $50 million investment in Quixey, a search
engine for mobile apps.
Alibaba is building a presence in the U.S. as it's preparing to file for an initial public offering
in New York as soon as this month. Investment banks value the company
at as much as $200 billion, making it the second-biggest Internet
business by market value behind Google. Listing in the U.S. "will make
us a more global company," Alibaba has said.
In the U.S., Alibaba isn't a household name. Andreessen Horowitz, which had invested in
previous financing rounds for Lyft, and Coatue Management introduced
Alibaba to the startup, which eventually led to the deal, according to
Lyft co-founder John Zimmer. (Bloomberg LP, the parent of Bloomberg.com,
is an investor in Andreessen Horowitz.)
"They talked a lot about
international and how they could be helpful as we expand
internationally," Zimmer said. "That was really valuable to us."
While
$250 million may seem like an eye-popping number, funding rounds of
this size are starting to become more common. Last month, seven U.S.
technology companies planned to raise at least $100 million each,
compared with 16 during all of last year. Uber Technologies, Lyft's
chief rival in the U.S., was valued at $3.5 billion in a funding round last summer.
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