Activist investor Carl Icahn sees a big opportunity in Uber’s main competitor Lyft.
He just pumped $100 million into the lesser-known ride-sharing startup, according to The Wall Street Journal. A managing director from Icahn Enterprises will join Lyft’s board of directors. The company raised an additional $50 million from an anonymous source, the Journal said.
Icahn told the paper that investing in Lyft was a “no-brainer,” given that it’s being valued at just $2.5 billion compared to Uber’s $41 billion.
Icahn appears to be trying to cash in on the difference between the two companies, or to start a fight with Uber. Yet he appears unfazed: “If you look at the way the market evaluates Uber and then look at the valuation of Lyft—Lyft is a tremendous bargain,” Icahn said in an interview. “There is room for two.”
Lyft president John Zimmer told the newspaper that Icahn’s new role with the San Francisco-based company could prove helpful going forward, and could include him making connections and fundraising. “As we look to the future to raise capital, whether it’s next year or whenever, that’s going to be a large validation,” Zimmer told the Journal.
Icahn’s $100 million investment in Lyft pales in comparison to some of his multibillion-dollar investments in Apple, CVR Energy and eBay, according to the article.
While Uber has an international focus with service in over 250 cities around the world, Lyft is still confined to the U.S., where it operates in 65 cities.
Interestingly, Icahn is now an investor in the same company as Marc Andreessen with whom he had a very public spat last year over Icahn’s fight to have eBay spin off its PayPal unit (Andreessen is on the eBay board of directors). In a statement this morning to Fortune’s Dan Primack, Andreessen joked: “Rumors that Lyft is spinning off the ride-sharing business from the mustache-licensing business are completely untrue.”
Additional reporting by Dan Primack.