Carl Icahn, one of the most outspoken activist investors in Wall Street, has just made a $100 million investment in ride-sharing company Lyft.
Lyft, the biggest competitor to controversial Uber in the industry, has also raised an additional $50 million from other investors, in what is an extension of the company's $530 million funding round which began in March.
Lyft now has an estimated value of $2.5 billion.
"There's room for two in this area," Icahn said in a phone interview with the New York Times. "What I'm saying is there is a secular change going on with the way people are getting around, and with urbanization, it means more people living in urban areas."
By two, Icahn is referring to himself and Uber CEO Travis Kalanick, who has previously been the loudest voice in pushing for public support of ride-sharing start-ups. It seems Icahn will join Kalanick in the quest to overhaul the transportation industry.
"I believe that ride-sharing is poised to become a fundamental component of our transportation infrastructure," Icahn said, with his involvement in the industry being seen as confirmation that the ride-sharing industry is indeed going to continue growing by Gartner VP Thilo Koslowski.
According to Lyft co-founder and president John Zimmer, the company is planning to use the raised capital to be able to continue Lyft's growth in the United States while still developing its smartphone app. Lyft has also hinted at possibly expanding to other countries, but there have been no official announcements made yet.
Lyft and Uber have both been raising massive amounts of funding recently, with Lyft's rival having raised over $5 billion. Uber is reportedly looking to raise $1.5 billion more, which could value the company at about a whopping $50 billion.
Icahn's investment in Lyft is considered as surprising to most, underscoring the trend in how hedge funds, mutual funds and other institutional investors are now looking to make investments in private technology-focused companies. It will be strange, however, for Icahn to be a co-investor in Lyft with Marc Andreessen, Andreessen Horowitz venture capital firm co-founder, as the two Wall Street fixtures have had their differences in the past.
Icahn has previously invested in public technology companies, but has often had contentious relationships with them. Once known as a corporate raider, Icahn has an abrasive style of buying stakes in public companies then begins to aggressively push for change in how much the company gives back to its investors.
For example, Icahn pressured Apple to make share buybacks to use its cash pile. Apple was pushed to do so, buying back $30 billion worth of stock last month.
