Lyft beats Uber to the punch in IPO filing

7 Dec 2018150 Views

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Lyft car sign. Image: Lyft

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Ride-sharing firm Lyft looks set to go public in the near future.

On Thursday (6 December), Lyft announced it had filed a draft registration statement with the US Securities and Exchange Commission (SEC) for its anticipated IPO.

According to Reuters, the company was last valued at approximately $15bn in a private fundraising round. Lyft was founded three years after Uber in 2012 by John Zimmer and Logan Green.

IPO on the cards

The San Francisco-based firm could go public as early as the first quarter of next year, but this is dependent on how fast the filing is reviewed by the SEC. Its valuation at this point is likely to end up somewhere in the range of $20bn to 30bn. The IPO will be underwritten by JPMorgan Chase, Jeffries and Credit Suisse.

Lyft’s competitor, Uber, is valued at more than $100bn and is also expected to go public in 2019. While Lyft is growing faster than the latter, it is also losing money and is still placed a very distant second. It lost $254m in the third quarter of 2018, although revenues increased to $563m.

A strategy play

According to Recode, there are some strategic reasons why Lyft has chosen to announce this decision now.

For one, the company will have the first pick of investors, who may not be willing to invest in two different ride-sharing firms. Although IPOs are no longer as much of a crucial money-raising exercise, the marketing potential of being first in with the announcement is undeniable.

Both companies’ IPOs are going to be tests for a stock market that has recently been shaken when it comes to the perception of technology unicorn companies.

Both are also engaged in driverless car trials, with Lyft having purchased UK-based start-up Blue Vision Labs to help develop its plans. In 2016, company co-founder Zimmer predicted a fully autonomous vehicle fleet within five years.

Ellen Tannam is a writer covering all manner of business and tech subjects

editorial@siliconrepublic.com