Ride-hailing company Lyft is buying European taxi app FreeNow from German automakers BMW Group and Mercedes-Benz for $197 million, a deal the company says marks it biggest expansion outside of North America. Lyft stock was higher in early trading.
Lyft said it will fund the deal with cash on hand and expects it to close later this year, according to the company's news release. FreeNow operates across 150 cities in Ireland, the U.K., Germany, Greece, Spain, Italy, Poland, France and Austria. Lyft said the deal will add about $1.13 billion in annualized gross bookings. Lyft was projected for $18 billion in 2025 gross booking prior to the deal, according to FactSet analyst consensus.
"We're on an ambitious path to build the best, most customer-obsessed mobility platform in the world, and entering Europe is an important step in our growth journey," Lyft Chief Executive David Risher said in a statement.
Lyft said there will be no immediate changes to the FreeNow app. But the company will work to allow users to seamlessly use either app.
In a client note Wednesday morning, Piper Sandler analyst Thomas Champion was positive about the deal. He holds an overweight call on the stock.
"We think international expansion makes sense and at roughly $197MM (roughly 0.2x gross bookings), the price paid feels reasonable," Chamption wrote. "While pricing pressures did emerge in 4Q24, Lyft has managed to hold and even gain share in test cities that have seen autonomous vehicle rollouts."
Lyft Stock Down 15% In 2025
Lyft stock rose more than 1% to 11.08 in early trades on the stock market today. In other Lyft news this morning, Reuters reported that activist investor Engine Capital is gearing up for a proxy battle at Lyft.
Lyft stock rallied late last year after getting a positive response to its third quarter earnings report. But its gains have slowly faded. The stock is down 39% from 12 months ago and down 15% year-to-date.
The growth of autonomous ride-hailing from the Alphabet-backed Waymo, plus Tesla's pledge to enter the market, have weighed on shares of both Lyft and its larger rival Uber since last spring.
Lyft was double-downgraded to a sell call by Bank of America analysts earlier this month on concerns about robotaxis.
