Lyft aims for IPO valuation of up to $23B
Lyft Inc. plans to peg its valuation at between $21 billion and $23 billion when the ride-hailing service kicks off the roadshow to market its initial public offering Monday, according to people familiar with the matter.
The range, equating to between $62 and $68 a share, is preliminary and could change by the time the shares start trading around the end of next week, the people said. The overall valuation includes the roughly $2 billion Lyft is expected to raise in the offering. The company and its underwriters will set a final IPO price based on feedback from investors in the roadshow.
With the Lyft IPO process entering its final stage, what’s expected to be one of the most hectic years for new issues is about to get under way in earnest. Though the IPO market got off to a slow start this year because of the partial government shutdown, Lyft’s eagerly anticipated debut is expected to be followed by a wave of listings by Uber Technologies Inc., Pinterest Inc., Slack Technologies Inc. and others as fast-growing Silicon Valley startups cash in on heavy demand on Wall Street.
In a sign of that demand, even at the low end of the expected range, Lyft would be valued far more than it was in its last private valuation—$15.1 billion in early 2018. That would make it one of the largest U.S.-listed new technology offerings since Alibaba Group Holding Ltd.made its debut in 2014, according to Dealogic.
Last year, Lyft posted revenue of $2.16 billion, more than double the 2017 figure. It nearly tripled the number of active riders from the end of 2016 to the end of 2018. The company’s net loss, meanwhile, expanded to $911.3 million last year from $688.3 million in 2017.
The IPO represents a big test of how richly valued, private tech companies fare in the public markets and will be closely watched by the other startups waiting in the wings. Most tech companies that made their debut last year received warm welcomes, with their shares outperforming the broader market.
Uber, Lyft’s larger rival, is expected to debut in the next few months and has received proposals from bankers that value it as high as $120 billion. Bankers say Lyft’s valuation will play a role in the target Uber and its underwriters ultimately settle on.
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Lyft’s founders, John Zimmer and Logan Green —who serve as president and chief executive, respectively—together own roughly 7% of Lyft, but will have nearly 50% voting control, according to people familiar with the matter. The men will own shares that will receive 20 votes each, compared with one vote per share for common stockholders. That will give them significant influence over major decisions at the company, ranging from the election of directors to whether to sell one day.
Lyft will market the offering to mutual funds and hedge funds in meetings in New York and other cities. The shares could be priced as soon as March 28 and begin trading the following day on Nasdaq Stock Market with the symbol LYFT.