Lyft investors Andreessen Horowitz and Peter Thiel’s Founders Fund discreetly sold off part of their stakes to Saudi Arabia’s Prince al-Waleed bin Talal and his Kingdom Holding Co. for $148 million in a deal authorized by the ride-hailing startup.
The sale of shares by the two major investors comes on the heels of Lyft’s Series F funding round in which the company raised $500 million from General Motors for developing self-driving cars; Prince al-Waleed and several other investors contributed another $500 million in the round as well.
While the reason behind the sale remains unclear, it is suspected that it was led by the venture funds’ eagerness to provide return on investment (ROI) to their limited partners, who have held up their investments in Lyft-like startups to milk higher rewards, as The Wall Street Journal pointed out.
Another possible reason, perhaps the riskier one, is that Horowitz and Thiel are securing their investments because Lyft holds a precarious position in the market as it faces stiff competition from Uber, which has far deeper pockets with its $62.5 billion valuation. The deal between Horowitz and Prince al-Waleed also marks the first time Horowitz has reportedly sold shares of a closely held company like Lyft on the secondary market.
“The bet on Lyft is that ride-sharing is a bigger market than just a car for hire, and we are bringing the full resources of the firm to bear to advance their success,” said Scott Weiss, the Andreessen Horowitz partner who spearheaded the investment in the company.