Carl Icahn invests $100 million in ride-sharing service Lyft
(Reuters) - In an uncharacteristic move, activist investor Carl Icahn's Icahn Enterprises LP (IEP.O: Quote) made a $100 million investment in Lyft Inc., adding momentum to the ride-sharing company's rapid expansion but leaving its cash pile far behind rival Uber.
Icahn joins a long list of backers for the three-year old startup, including Andreessen Horowitz, New York-based technology hedge-fund Coatue Management, Chinese e-commerce giant Alibaba (BABA.N: Quote), and hedge fund Third Point Management.
Lyft, known for cars displaying a pink moustache logo, uses a smartphone app to match riders with paid drivers who use their own cars rather than livery vehicles, a service similar to one offered by Uber Technologies Inc.
But Uber, with a global presence, more diverse services including limousine-like rides, and aspirations of expanding into logistics, is a much bigger company. It carries a $40 billion valuation compared to Lyft's $2.5 billion.
Lyft backers question whether Uber's broader mandate amounts to a valuation that is effectively 16 times greater than Uber. In many of its international markets, including China, Uber is facing tough competition from entrenched local players, while in others, such as Korea, it faces legal hurdles.
Uber fans say that building a global brand ultimately will make the company a stronger player, even if it faces setbacks in some markets along the way.
Technology has been a big part of Icahn's investment focus, with bets like Apple APPL.O, Nextflix (NFLX.O: Quote) and eBay, but he generally does not invest in companies as young as Lyft, which was founded in 2012.
Last year, Icahn accused Andreessen Horowitz partner Marc Andreessen, who was a board member of eBay (EBAY.O: Quote) at the time, of having a conflicted role because of Andreessen's venture investments that competed with eBay.
On CNBC, Andreessen compared Icahn to a lying six-year-old. Now that he and Icahn will be co-investors in Lyft, he is making light of the past squabble. Continued...