Lyft snares $250 million for U.S., international growth

Nick Riggal gets a ride in San Francisco using the Lyft car-ride app. Photo: Paul Chinn, The Chronicle

Lyft, the app-enabled ride service based in San Francisco, is just 20 months old, but is growing up in a big way.

Today it announced a new $250 million funding round, bringing its total raised to $333 million. “Since launching our second city one year ago, Lyft has grown to 30 cities across the country, and this investment will help us continue to grow in the United States and around the world,” it said in a blog post.

Lyft, like rivals Uber, Sidecar, Wingz and Summon, still faces a bumpy road as regulators, insurers, the taxi industry and others question its business model — but that doesn’t seem to deter investors. Existing VC backers Andreessen Horowitz, Founders Fund, and Mayfield participated in this round, along with new investors Coatue and Alibaba Group, Lyft said.

Challenges for the new transportation network companies, or TNCs, which allow passengers to request paid rides from freelance drivers in their own cars, continue to mount. Seattle is on the verge of a Draconian clamp-down, in which it would limit Lyft, Uber and Sidecar to having 150 cars each on the road at any one time — even though the companies say they each have roughly 1,000 drivers in the city. San Francisco, under the urging of the embattled taxi industry, is starting to consider whether it could overlay regulations on top of those created by the state Public Utilities Commission. The PUC is considering expanding its insurance requirements for the companies to make sure their $1 million policies take effect the moment drivers turn on their smartphone app to indicate they are ready for business.

Uber raised $258 million last summer, for a total raised of more than $307 million, giving it a $3.5 billion valuation. Lyft originally was expected to raise $150 million in this round, which would have given it a $700 million valuation, according to the website Re/code.