If you are the kind of person who would never call spending $100 million on something a bargain, then you must not be Carl Icahn.
Today, the billionaire investor, best known for throwing his weight around to get his way with some of the world's biggest companies, announced he's investing $100 million dollars in the ride-sharing startup Lyft. The investment is part of an additional $150 million extension to a $530 million round of funding that Lyft raised earlier this year. It's an unusual deal for Icahn, who is more commonly associated with publicly traded giants like Apple and eBay. But in an interview with The Wall Street Journal, Icahn justified the decision the way most of us justify buying open-toe sandals in the middle of winter: He got a good deal.
"Lyft is a tremendous bargain,” Icahn told the Journal. That, of course, is compared to rival company Uber, which---with its $41 billion valuation---is much more pricey to buy into than Lyft, now valued at $2.5 billion. The investment is also a sign that Icahn believes Lyft has ample room to grow, even in a world where Uber's presence looms large.
As Icahn said in a statement, "I believe that ride-sharing is poised to become a fundamental component of our transportation infrastructure. The company's revenue growth to date has been extremely compelling, and increasing urbanization over the next 5 to 10 years should enable the company to maintain that trajectory."
He's not the only one who thinks so, of course. Icahn joins established investors, including his sometimes rival Marc Andreessen who resigned from eBay's board after Icahn accused Andreessen of investing in companies that compete with eBay.
While the deal could make for some awkward board meetings, having the stamp of approval from one of the country's most established investors is nothing but good news for Lyft. It lends Lyft, which so often plays second fiddle to Uber, an added sense of legitimacy that could help the company attract additional funding in the future.
In a statement, Lyft's president John Zimmer said the company plans to commit this funding to "deepening" the company's U.S. footprint, which currently includes 65 U.S. cities. By deepen, it's safe to assume he means adding additional features to existing markets, rather than aggressively expanding to new markets, as Uber has done, growing to more than 250 cities around the world. During a recent talk at New York's TechCrunch Disrupt conference, Lyft CEO Logan Green said that was the company's overarching goal for the foreseeable future and pointed to the success of its carpooling service Lyft Line as an example of how that strategy is paying off. As Green put it, "We are really focused on going deep rather than going broad."
