Lyft Plans for Early 2019 IPO
On Thursday, Lyft Inc. announced that it had filed confidential paperwork for an initial public offering, keeping the company on track in its agenda to reach the public market by March or April of 2019, although the timing is “subject to market and other conditions.” The underwriters for the IPO are said to be JPMorgan Chase, Credit Suisse and Jefferies, while the number of shares and price range is still unknown.
Filing with the Securities and Exchange Commission now suggests that Lyft is ahead of rival company Uber Technologies Inc. Lyft is a much smaller company than Uber; until recently, Lyft only operated in the United States and had just expanded to Canada, although it is also exploring the Western European market. Uber, by contrast, is available in almost 70 countries globally and, as of October, held 69 percent of the US market while Lyft had 28 percent, according to credit-card spending tracker Second Measure.
Both companies are also trying to expand into bicycle and scooter rentals, with Uber acquiring electric bike company Jump in early 2018 and Lyft recently completing its acquisition of Motivate, the company that manages Citi Bike. Unlike Uber, however, which has faced a series of scandals this year, Lyft has managed to avoid bad publicity. Reaching an IPO first would make Lyft the first ride-hailing company to go public and would also give public investors their first chance to participate in the increasingly popular industry.
While ride-hailing companies have become more widespread, the business is still unprofitable and could face competition with the development of self-driving cars. Lyft posted its third-quarter revenue of $563 million, an 88 percent increase in comparison to the year-earlier period, but it lost $254 million in the most recent quarter. Sources estimate, however, that while currently valued at around $15 billion, Lyft’s IPO could increase its valuation to between $20 billion and $30 billion.
Lyft’s filing for next year is only the start of what is expected to be a year full of IPOs, following 2018’s high-profile IPOs; the valuation of both of Dropbox Inc. and Spotify Technology SA was over $1 billion. Uber is required by a SoftBank investment provision to file for an IPO by Sept. 30, 2019, and has received bank proposals that value the company as high as $120 billion. Three other highly valued, venture-backed tech companies— home-sharing startup Airbnb Inc., analytics firm Palantir Technologies, and digital payment company Stripe Inc. —are all planning to be IPO-ready in 2019.