The tech IPO race is underway, with majors like Slack, Uber, Pinterest and now ride-sharing giant Lyft all planning or thinking about going public in 2019.
The market for tech IPO offerings is being called a mess in 2019, but it hasn’t stopped some start-ups from taking actions towards going public anyhow.
Thanks to market volatility at the end of 2018, in addition to the government shutdown in January that put public filings on hold, 2019 as a “banner year” has actually started sluggishly. The down market has left lots of extremely promising tech IPOs to be delayed, and bankers are now expecting an inundation of IPOs in the second quarter of 2019, starting in March.
Through the first two months of 2019, there have been just a handful of tech start-ups that have taken main actions towards going public. Some of the most extremely prepared for startups have made their very first moves. Uber and Lyft are dueling it out to be the first of the multibillion-dollar ride-hailing platforms to go public.
Lyft seeks to raise $2 billion
Ride-sharing start-up Lyft, as expected, announced that it is starting the roadshow for its IPO– setting the clock ticking for its IPO most likely in the next two weeks. Around that, it also filled in some more information. The stock will trade as “LYFT” on Nasdaq, and the IPO price is presently set for between $62 and $68 per share to offer 30,770,000 shares of Class A typical stock, the company stated. It aims to raise as much as $2.1 billion at the higher end, or $1.9 billion at the lower end.
The company won’t sell all of its shares to the general public through the offering, however. Lyft’s co-founders– CEO Logan Green and president John Zimmer– will hold just less than half the votes among shareholders. They’ll be given a unique issue of stock that grants them 20 votes for each of their shares.
A set amount of the regular shares will go to employees of the company, and some will be offered to its front-line motorists. Drivers will be getting benefits of as much as $10,000 if they have completed 20,000 rides and $1,000 if they have contributed between 10,000 and 20,000 trips by the end of last month. And they will be allowed to take that perk in shares of the company at the IPO rate.
Tech financiers are familiar with companies lose money, sometimes for years after they go public. Investors would be mainly betting on Lyft’s potential customers for future growth, particularly if they are interrupting an existing service. Amazon (AMZN), which went public in 1997, didn’t report its first revenue till the end of 2001. It is now consistently profitable and amongst the most important companies in the world.
Uber has its own plans
While Lyft may beat Uber to the market, Uber is still the top-dog in the ride-sharing world. With an appraisal of around $76 billion, the app might end up stealing Lyft’s thunder as it ponders its own listing.
In April, Uber is likely to provide its required public disclosure, called an S-1, and launch its investor roadshow, the business stated. Those events will set in motion the Wall Street debut of some of Silicon Valley’s most closely viewed companies.
The timing for Uber’s IPO means it will more than likely hit public markets soon after Lyft finishes its own public offering.. Uber decreased to comment.
Uber’s organization is much larger and more diverse than Lyft’s, and the business has moved reasonably swiftly to go public given that both firms filed confidential documentation for an IPO at the very same time in December.
Uber, an international logistics and transportation company, is seeking an appraisal as high as $120 billion, although some analysts have actually pegged its worth closer to $100 billion based on chosen financial figures it has divulged.
Lyft, a smaller firm which has ride-hailing and bike-renting company in the United States and several Canadian cities, is seeking a valuation of $20 billion to $25 billion, up from its $15 billion valuation as a personal business.
The two business are positioned to start a string of hotly expected public debuts from highly valued tech companies, stimulating the IPO market after a quiet start to the year.