In an interesting and somewhat surprising bit of news, General Motors recently approached the ridesharing firm Lyft about acquiring it … but was declined.
General Motors, of course, already owns a 9% stake in Lyft, following an investment of $500 million last January. While it’s interesting enough that General Motors is so confident in Lyft’s future that it would be willing to put down the cash for a full acquisition, Lyft’s decision to turn down the offer is the surprising bit.
What’s the reasoning? What else might Lyft execs have in mind for the future of the company?
A couple of notes here: Lyft is privately held, and was valued at around $5.5 billion at the time of GM’s 9%-stake investment last year; the investment by GM was accompanied by GM President Dan Ammann joining Lyft’s board of directors, as a condition of the investment; and the recent offer of acquisition was accompanied by an actual financial figure, but this figure hasn’t been publicly revealed.
GM-Volt.com provides more details: “The Detroit Free Press is reporting that the automaker approached Lyft in ‘recent weeks’ about a potential acquisition that was declined. Citing a post from technology website The Information, the report said a ‘person briefed on the situation,’ stated that after seeking other potential strategic buyers, Lyft decided to raise funding from venture capital firms and other investors.”
Continuing: “The two companies are said to be ‘happy with the alliance and the progress made to date,’ GM told Fortune, and the partnership has achieved relative success in their initial projects. With the Express Drive program, Lyft drivers can lease select GM models in Chicago, Baltimore, Boston and Washington, DC. The program will soon expand to San Francisco, Los Angeles and Denver.”
I wonder if Lyft’s decision to decline the GM offer will lead to GM looking elsewhere for further inroads into the fast-growing ridesharing market. Alternatively, I wonder if it will come back in the future with another offer and nab the ridesharing startup.
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