Lyft closes $530 million funding round

Ride-sharing app developer Lyft plans to speed up its global expansion after closing a $530 million funding round led by Japan's Rakuten.

Lyft has upped the stakes in its ambitious drive to take on Uber, saying it has raised $530 million in a funding round led by Japanese e-commerce giant Rakuten to fuel expansion in the US and abroad.

The latest investments peg the value of Lyft at $2.5 billion, media reports said, making it a significant but smaller ride-sharing rival to the globally oriented Uber, valued at $41 billion.

"We will accelerate more quickly toward a world where every seat is filled and every driver and passenger is empowered to join together in improving our economy, environment, and local communities," San Francisco-based Lyft said in a blog post. "We will deepen our presence in the 65 markets where we operate, and expand into new cities."

In a statement from Tokyo, Rakuten said it is putting $300 million in as the lead investor in the latest funding round.

"We have seen the future, and this is it," said Hiroshi Mikitani, founder and chief executive of Rakuten. "By empowering human connection, the sharing economy is going to fundamentally transform the service industry and benefit society.

"We believe businesses like Lyft that unlock the latent potential that exists in people and society hold the key to the future," he said.

The statement said the new funding will allow Lyft "to continue growing its service and invest in both domestic and overseas expansion", but did not indicate which countries Lyft plans to serve.

Its website shows that it operates in 28 US states, as well as the capital, Washington DC.

Like its rivals, Lyft uses a smartphone app that allows a driver and rider to connect, using location-based technology in the handsets.

The company said it is working on improving "technology that reduces traffic, takes cars off the road, builds community, and improves the economy".

Uber has expanded to around 200 cities worldwide in more than 50 countries since launching in 2010.

Both services have faced obstacles with local regulators and complaints from traditional taxi services about unfair competition.