Monday, June 27, 2016

Uber Comperitor Lyft Hires M&A Banker Qatalyst Partners

From the Wall Street Journal:

Hiring comes as highly valued startups find it tougher to raise funds from venture capitalists
Ride-hailing startup Lyft Inc. has hired Qatalyst Partners LP, the boutique investment bank best known for helping tech companies find a buyer, according to people familiar with the matter.

Frank Quattrone, the founder and executive chairman of Qatalyst, has contacted companies including large auto makers about acquiring a stake in Lyft, the people said. It isn’t clear whether Lyft is aiming to sell itself or raise new funding, or if it is open to both.

Lyft, the largest U.S. rival to Uber Technologies Inc., has tried to keep up with its larger competitor as both companies burn through capital to expand their ride-hailing services. The two San Francisco companies pour millions of dollars into subsidizing low-price rides and giving cash bonuses to new drivers, and both Uber and Lyft have said such spending has put them on a path to profitability.
Lyft has raised about $2 billion in funding, or less than one-sixth the total funds raised by Uber. Lyft was last valued at $5.5 billion by investors including auto maker General Motors Co.
Hiring Qatalyst, one of the most active Silicon Valley deal makers, may signal Lyft is open to a sale. Qatalyst ranks fourth this year among banks advising on U.S. acquisitions, working on deals totaling $33.7 billion, according to Dealogic. Those deals include a coveted role advising LinkedIn Corp. on its $26 billion sale to Microsoft Corp. , announced two weeks ago.

One potential buyer may be General Motors, which paid $500 million for a 10% stake in Lyft earlier this year and indicated that the ride-hailing service could be crucial to the future of automobiles. The two companies have since agreed to develop self-driving cars and to offer deals on rental cars to Lyft drivers....MORE
"Lyft’s $5.5 Billion Plan for World Domination"
"GM, Lyft to Test Self-Driving Electric Taxis"