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Lyft gets $1B investment, led by Alphabet

The ride-hailing company's valuation is now at $11 billion, which could help fuel its quest to beat rival Uber.

Lyft CEO Logan Green, CapitalG partner David Lawee and Lyft President John Zimmer.

Looks like Lyft could soon be appearing larger in Uber's rear-view mirror.

Confirming last month's reports, Lyft announced Thursday that Google-parent Alphabet is leading a $1 billion financing round into the ride-hailing company. This ups Lyft's valuation from $7.5 billion to $11 billion. The funding is coming from CapitalG, one of Alphabet's investment arms.

"CapitalG is honored to work with Lyft's compelling founders and strong leadership team," David Lawee, CapitalG partner, said in a statement. "Ridesharing is still in its early days and we look forward to seeing Lyft continue its impressive growth."  

Compared with Uber, Lyft has long been the small dog in the ride-hailing world. Before now, it's received $2.6 billion in venture funding, whereas Uber has received $12.9 billion and is valued at $68 billion. But, as Uber has been mired in scandals over the last year, Lyft has steadily grown.

Since January, Lyft has launched in dozens of new cities across the country and now is nearly as ubiquitous as its rival. It's currently available in 49 states and said it recently completed its 500 millionth ride. The company is also reportedly looking to expand internationally. It could be in Canada as soon as year's end and then move into Australia, Mexico and the UK.

"While we've made great progress towards our vision, we're most excited about what lies ahead," John Zimmer, Lyft's president, said in a statement.

Lyft has increasingly been working on projects outside of traditional ride-hailing. It's partnered with airline companies, like JetBlue and Delta, along with health insurers such as Blue Cross Blue Shield. The company didn't disclose how it intends to spend its new investment.

Lyft has also gotten into self-driving cars. The ride-hailing service has partnered with several companies in the autonomous vehicle space, including nuTonomy,, JLR, GM and Waymo (Alphabet's self-driving car unit). Lyft is opening a Silicon Valley office dedicated to self-driving cars, called Level 5, and has said it will roll out the vehicles to passengers in San Francisco in the near future.

Alphabet's investment in Lyft could be a sore spot for rival Uber. Uber is currently locked in a legal battle with Waymo. Waymo accused Uber of stealing its autonomous vehicle technology; Uber calls Waymo's claims "baseless." The trial is slated to begin in December.

CNET's Joshua Goldman contributed to this report.

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