Ride-Hailing Firm Lyft Files for IPO

December 6, 2018 Updated: December 6, 2018

SAN FRANCISCO—Ride-hailing service Lyft announced in a press release on Dec. 6, it has filed with the Securities and Exchange Commission (SEC) for an initial public offering (IPO) of its common stock.

Lyft beat it’s rival Uber in registering for an IPO, taking the risk of entering a choppy market that will test investor appetites for high-profile but loss-making technology companies.

The San Francisco based company confidentially submitted a draft registration statement with the SEC.

The IPO is expected to commence after the SEC completes its review process, subject to market and other conditions.

The number of shares to be offered and the price range for the proposed offering have not yet been determined. The company was valued at just over $15 billion earlier this year.

Reuters reported in October that Lyft had chosen JPMorgan Chase & Co, Credit Suisse, and Jefferies as underwriters for its IPO.

The company was set up in 2012 by technology entrepreneurs John Zimmer and Logan Green, 3 years after Travis Kalanick co-founded Uber.

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The IPO is slated for the first half of 2019, sources told Reuters. Uber is expected to pursue an IPO next year that could value it at about $120 billion, while home-renting company Airbnb Inc—valued at $31 billion—is also expected to list itself in 2019.

High-profile tech unicorns dominated the U.S. IPO landscape this year. Dropbox Inc. was valued at nearly $13 billion in its March debut, while music streaming giant Spotify went public in April with a $26.5 billion valuation.

But the recent turmoil in the financial markets due to escalating trade tensions between the United States and China could dampen investor enthusiasm for the much-awaited tech IPOs.

Uber and Lyft’s IPOs are widely seen as a litmus test for investor tolerance on lack of profitability when it comes to iconic technology unicorns.

The two companies have taken hits to their bottom lines in order to attract drivers and enter new markets, although they have made strides in narrowing their losses in recent years.

An illuminated sign appears in a Lyft ride-hailing car
An illuminated sign appears in a Lyft ride-hailing car in Los Angeles, Calif., on Sept. 21, 2017. (Reuters/Chris Helgren)

Uber’s well-documented problems have left it vulnerable to challenger Lyft.

Uber’s attempt to develop self-driving cars has also been bogged down during the past year amid allegations that it stole technology from a Google spinoff. It also suffered from a fatal collision involving one of its robotic cars.

Lyft and Uber have been diversifying in an attempt to provide more types of transportation.

Last month, Lyft completed its acquisition of Motivate, the nation’s largest bike-sharing company. Uber acquired bike-sharing company Jump Bikes earlier this year. Uber also invested in Lime, a bike and scooter-sharing company.

Additional reporting by Reuters and Jeremy Sandberg.

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