It was almost one year ago (to the day!) that my colleague Kim Mai-Cutler wrote our first story on Lyft, and how the company was going to offer some lower-priced competition to on-demand ride leader Uber in San Francisco. Now, 366 days later, Lyft is celebrating the anniversary of that launch with some huge news: It’s raised a $60 million round of financing led by Andreessen Horowitz.
The new funding will give Lyft a huge shot in the arm as it plans to expand aggressively both in the U.S. and internationally, according to founder John Zimmer. And it will have Andreessen Horowitz to help, as a16z general partner Scott Weiss will be joining the board and the firm will be lending some of its operational experience to Lyft as it scales up.
“Andreessen Horowitz has demonstrated that they are the top VCs in the world to work alongside entrepreneurs and build real and established businesses,” Zimmer told me. “It’s great to work alongside someone like Scott, and Mark and Ben, who have built really large companies and are willing to roll up their sleeves and work alongside us.”
“This is why [Andreessen Horowitz] came together as an organizing principle. All of us have scaled companies,” Weiss said. As it pertains to Lyft and its growth moving forward: “Now it’s an execution play of bringing this out to the entire world. It’s about, ‘How do you bring in management talent and move faster than you thought you could?’ We’re going to put the full weight of the firm behind [Lyft] doing that.”
In addition to its new funding from Andreessen Horowitz, Lyft is also confirming a $15 million round led by Founders Fund, which we reported on earlier this year. Altogether, the company has raised a total of about $83 million since being founded as Zimride in 2007. Along with Weiss and founders Zimmer and Logan Green, the Lyft board of directors also includes Founders Fund principal Geoff Lewis, as well as Raj Kapoor, who had invested in the company as managing director of Mayfield Fund.
30,000 Rides A Week
The funding comes as Lyft is already growing rapidly in all of its markets, including San Francisco, where it competes against ride share offerings from Uber and SideCar. There’s also growing adoption of taxi e-hail apps such as Flywheel and hybrid taxi-community app InstantCab. With mounting competition, Lyft has more than doubled its number of drivers in its launch market, and is still trying to keep up with demand.
The incredible growth that Lyft has shown is one thing that impressed Weiss and Andreessen, as they evaluated the company for investment. “Two months ago, they were doing 14,000 rides a week,” Weiss told me. “Now they’re doing 30,000 rides a week.”
Lyft is also seeing fast adoption in new markets. It launched service in Los Angeles in January, Seattle in March, and Chicago earlier this month. In each case, both the number of drivers and passengers who have signed on in the first several weeks of a new market has outpaced the market that preceded it.
With the new funding in place, Lyft plans to accelerate its expansion schedule. The company brought on Cherry co-founder Travis VanderZanden to lead operations and, with three or four launches under its belt, the team thinks it’s got its expansion playbook down. Lyft will be hiring in all aspects of its business — community, engineering, operations, and public policy — as it plans to scale globally. Yes, globally.
While it plans to expand into a number of new markets, the Lyft team recognizes that there will be challenges on the regulatory front as it attempts to get regulators on board with the idea of on-demand ride-sharing services. Competitor SideCar has faced regulatory scrutiny in a number of new markets that it has launched in, including Austin, Philadelphia, and New York City.
So how does Lyft plan to convince regulators that its service should be allowed to operate? Safety is key.
“I think this is the year for a lot of that [regulation] to get ironed out,” Zimmer told me. “Our approach is and always will be to work together with regulators and stress what’s important, which is safety. I think technology can actually get us to a safer place.”
For Lyft, that includes background checks and driver safety checks. But the company goes above and beyond that, trying to hire drivers who are actually, you know, friendly and nice to talk to. And, of course, it ties everything back to an identity layer, requiring all drivers and passengers to connect to a Facebook account. That helps to ensure that, even if something does go wrong, Lyft has a way to identify both parties in the case of a ride gone bad.
Weiss admits that requiring someone’s real identity through Facebook Connect could limit the potential market in some ways, but it also builds a required level of trust between driver and passenger. Breaking that trust barrier is necessary when you’re talking about peer-to-peer services, and Lyft appears to have succeeded. For instance, more than 50 percent of Lyft passengers are women, Weiss notes.
So far, its safety record is one of the main reasons that Lyft has won over regulators in jurisdictions like California. And it’s a key part of Lyft’s plan to get regulators in upcoming expansion markets to allow ride sharing in their cities.
Airbnb for transportation?
Lyft has plenty of work ahead, Zimmer admits. But he’s confident that the company is on the right track to bring peer-to-peer rides to the world, and in doing so, fundamentally improve the transportation industry. About 80 percent of seats in cars are empty today, and Lyft wants to change that. The funding is just a small part of what will help get the company there, as Lyft is still on “page one” of a 100-page story, Zimmer says.
“For us, raising money is not what we set out to do,” Zimmer tells me. “We want to change the world and create a new form of transportation. Now we have all the ingredients we need to build out our community and make transportation more affordable and efficient.”
For Weiss, the idea of establishing a peer-to-peer marketplace around transportation was fundamentally different from what others in the space were doing and is part of what attracted him to Lyft’s model. “It wasn’t that Lyft was using smart phone technology to make existing transportation systems [like cabs and limos] better,” Weiss told me. “It was using the existing capacity of cars already on the road.”
The end result, they hope, will be a more efficient use of existing resources. In that way, Lyft reminds Weiss a whole lot of Airbnb, another company that Andreessen Horowitz made a big bet on. Will Lyft do to transportation what Airbnb did to the tourism and hospitality industry? Only time will tell, but the folks at Andreessen Horowitz sure hope so.
For this week’s episode of Founder Stories, I sat down with Ilya Sukhar, co-founder and CEO of Parse. The interview was taped days before Parse was acquired by Facebook last month. Parse is a cloud app platform that provides a set of SDKs that enable developers to focus on the execution of their application instead of rebuilding backend functionality for every mobile platform. Sukhar shares his experience of leaving Salesforce and going through Y Combinator.
Sukhar, who entered YC as a solo founder, was connected to co-founder Kevin Lacker through Paul Graham. The duo then joined up with another co-founding team about a month into YC to build Parse.
“It was a big risk,” says Sukhar. “The founding relationship is a really deep one and there’s a lot of ups and downs to go through together.” Having only known his co-founders for a short time before deciding to work together, Ilya explains the risks and reality of starting a company with strangers. “It worked out well for me but I would not recommend it to other folks.”
In the later half of our discussion, Sukhar explains how he uses arguing tactics to learn whether an employee is a good fit and why stepping back from coding to focus on under-staffed areas of the company has given him the opportunity to learn more about each role before hiring someone to fill it.
Editor’s Note: Michael Abbott is a general partner at Kleiner Perkins Caufield & Byers, previously Twitter’s VP of Engineering, and a founder himself. Mike also writes a blog called uncapitalized. You can follow him on Twitter @mabb0tt.
Online real estate company Trulia just released its earnings for the first quarter of 2013, reporting that its revenue grew 97 percent year-over-year to $24 million.
Despite the growth, the company still posted a net loss of $2 million. On a non-GAAP basis, it lost 2 cents per share. Analysts had predicted a loss of 1 cent per share with revenue of $21.08 million.
Total traffic has grown too, from 20.6 million unique monthly visitors during this period last year to 31.4 million this year. And it had 11.4 million uniques on mobile. (Trulia has changed the way that it counts mobile traffic, so we can’t offer an apples-to-apples comparison — previously it was just usage of downloaded apps, but now it also includes traffic to the Trulia website from tablets and other devices.) And the number of subscribers has grown 42 percent year-over-year, to 27,920.
In the earnings press release, CEO Pete Flint said:
Trulia achieved an excellent start to 2013. We achieved another quarter of record revenue, driven by strong execution in both our Marketplace and Media businesses. Trulia’s mobile traffic continues to expand at a rapid rate, while our subscriber base grew by approximately 3,500 during the quarter.
In the past quarter, Trulia also launched a new recommendation engine called Trulia Suggest. Since the launch, Trulia says users have performed 2 million “likes” or “hides” on properties in the company database.
As of 4:45pm Eastern, Trulia is up 6.68 percent in after-hours trading.
The TechCrunch Disrupt Hackathon fast approaches and at this point, it’s important to start thinking about your hack’s design. Luckily, TechCrunch is happy to announce another partnership with the Design Trust to have crackerjack designers in attendance, polishing your creation to make it stand out in our esteemed judges’ eyes.
Who is the Design Trust, you ask?
The Design Trust was formed to provide teams with access to some of New York’s brightest visual and product designers during the hackathon. Now making its third consecutive appearance at the TechCrunch Disrupt NY Hackathon, Design Trust offers teams an opportunity to partner with one of their elite designers for consultations at the beginning of their hack as well as help with product execution.
“We’re very selective about the designers who become part of Design Trust,” according to Phoebe Espiritu who combines her experience teaching Entrepreneurship to designers as well as her recruiting experience for TechStars NY HackStars to select and lead the designers for Design Trust. “Fundamentally, we’re looking for designers who know how to ship.”
Designers interested in participating in the Design Trust for the April 27-28 Hackathon can still apply. Deadline for applications is by midnight (ET) April 24. You can apply to join Design Trust here.
We’re also releasing another round of tickets for developers and engineers, so grab them while you can! They go fast.
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In March, Yahoo made a big splash in its already dazzling list of acquisitions when it acquired Summly, a UK-based mobile startup led by 17-year-old founder Nick D’Aloisio that summarizes long texts to make them easier to read on mobile screens. Today, Yahoo CEO Marissa Mayer unveiled the first official fruit of that acquisition:
A 160-word summary of her hour-long, 2013 Q1 earnings presentation (original length, 2,000+ words).
So for those of you who don’t have the time or inclination to read the whole results transcript, or one of the many reports covering the earnings, but are still interested in what’s going on at Yahoo, here it is:
I’m pleased with the continued execution I see every day — our teams have been working very hard, especially in Q1. As a result of these initiatives and many others, the talent is undeniable — today, more applicants want to work at Yahoo, and more employees are staying. These teams bring an incredible mix of engineering and technical talent, which will help us accelerate our efforts in mobile development and contentpersonalization.The teams are already moving quickly to amplify the entrepreneurial spirit that’s so prevalent at Yahoo right now.
Designed to be more intuitive and personal, the new Yahoo experience is all about users’ interests and preferences. Yahoo is a consumer Internet company, and the consumer Internet is a growth industry. We’re on course to do what we said we would do — stabilize, and grow with the market.
[Did not make the cut: Yahoo's advertising revenue declines; the fact that search has outstripped display revenues; and that Yahoo currently has 300 million monthly active users on mobile as it gears up for a bigger push on the platform.]
In addition to Summly, which was acquired reportedly for $30 million, Yahoo in the last quarter also bought Snip.it, Alike and Jybe, “accelerating the Company’s efforts to build world-class technology and engineering teams in mobile and personalization.” That’s in addition to the wider push the company has also made to hold on to its own key talent and appoint a new raft of executives. It now has 11,300 employees on the books.
Read our full Yahoo earnings report here.