Lyft sets itself up to be one of first large tech flotations of 2019
In a statement on Thursday, Lyft announced it had submitted a draft registration statement with the US Securities and Exchange Commission (SEC), in a move which sets it up to be one of the first large tech flotations of 2019.
The number of shares on offer and the price range for the proposed offering have not yet been determined, Lyft said.
The company was valued at $15.1bn (£11.8bn) at its latest funding round in June, when investors led by Fidelity Investments poured $600m into the firm. Uber, by contrast, has been valued at $120bn in recent reports.
The San Francisco-based company is planning to float its shares in March or April, according to Reuters – probably ahead of Uber, whose chief executive, Dara Khosrowshahi, is aiming for an initial public offering (IPO) in the second half of the year.
Lyft and Uber have garnered billions of dollars in multiple funding rounds from private investors betting that the companies will dominate the future of urban transport, despite heavy losses. Lyft lost $254m in the third quarter of 2018, although revenues surged to $563m, the Wall Street Journal reported.
The firms compete across the US as ride-hailing platforms, connecting taxi drivers to passengers through their mobile apps. They have also invested in rival electric scooter services. Lyft currently operates only in the US, while Uber has expanded aggressively to more than 600 cities in 65 countries.
However, both Lyft and Uber are also investing heavily in autonomous vehicle technology. John Zimmer, Lyft’s co-founder, in 2016 said he expected a fully autonomous fleet to provide most of the company’s rides within five years. Self-driving technology – which removes the need to pay drivers’ fees – is expected to radically reduce the cost of on-demand transport services.
Jeff Zell, an analyst at advisory firm IPO Boutique in Florida, said: “With autonomous cars on the horizon, it is anyone’s guess where this sector goes in the future.
“But Uber and Lyft, as name-brand leaders, are leading the race and will have the war chests to be major players for years to come.”
Lyft has pursued a series of partnerships in the contest to be the first to bring autonomous taxis to the mass market. These partnerships have included traditional car firms – including Ford in the US and Tata-owned Jaguar Land Rover – as well as tech startups such as nuTonomy.
An IPO would also allow co-founders Logan Green and Zimmer to realise some of the value from the firm they founded in 2012 – three years after Travis Kalanick started Uber.
Other Lyft shareholders include Andreessen Horowitz, the venture capital firm which counts Airbnb and Facebook among its investments, and CapitalG, the strategic investment arm of Google’s corporate parent, Alphabet, which led a $1bn investment during an earlier round in October 2017. Alphabet also owns Waymo, another self-driving car technology firm that has partnered Lyft.
Uber’s backers include the Saudi Arabian state, Japanese fund Softbank, and some of Wall Street’s biggest banks, including Goldman Sachs and Morgan Stanley.
Lyft said the flotation would start after the SEC has reviewed its plans, but added that it would be “subject to market and other conditions”, an important consideration amid recent stock market turmoil in the US and elsewhere.