Published: Tue, March 05, 2019
Finance | By Loren Pratt

Lyft Gives a Lift to IPO

Lyft Gives a Lift to IPO

Lyft has filed paperwork for an initial public offering, promising to take investors on a ride to a transportation "revolution" but raising doubts about its ability to make a profit.

Lyft has famously been racing with Uber to be the first to the IPO market and is seeking to go public on the Nasdaq with the ticker symbol LYFT.

Lyft's revenue was $2.16 billion for 2018, double the previous year and up 528 percent from $343 million in 2016.

Other interesting information revealed in the S-1 - its 1.1 million drivers in North America ferried over 18.6 million "active riders" from October to December 2018.

Having raised more than $5 billion in funding, Lyft is now seeing its cash reserves dwindle: at the end of 2017, the company has about $1 billion in reserves, by the end of previous year, that amount had shrunk to $517 million.

However, losses have widened from $682.8m in 2016 to $688.3m the year after and $911.3m in the last 12 months.

Lyft's IPO is being led by JPMorgan Chase & Co (NYSE:)., Credit Suisse (SIX:) Group AG and Jefferies Financial Group Inc. In its filing, Lyft said it will pay cash bonuses of $1,000 and $10,000 to drivers who meet certain criteria, and that drivers may use those bonuses to buy the company's shares.

$1,000 to drivers in good standing who are serving on, or who have served on our Driver Advisory Council as of February 25, 2019.

"We believe this is a key indicator of the utility of transportation solutions provided through our multimodal platform, as well as the scale and growth in our business", the company said in the filing.

Lyft, for example, caused much hoopla by being the first of the expected mega-unicorns to file its IPO papers, as if a first-mover advantage matters in this regard.

As Curbed notes, going public may change that picture for Lyft, which may have to raise prices for customers in order to become profitable for shareholders.

Lyft expects to be valued at between $20 billion and $25 billion, up from its current $15 billion valuation, sources have told Reuters.

Lyft was founded by Logan Green and John Zimmer in 2007. Lyft plans to launch its two-week roadshow to pitch potential investors the week of March 18, setting up the company for an early April debut. Lyft serves over 300 markets in the US and Toronto.

Careem, whose backers include Saudi Prince Alwaleed bin Talal's investment firm and Japanese e-commerce giant Rakuten Inc, was valued at about US$1 billion in a 2016 funding round, making it one of the most valuable technology startups in the Middle East. "Although we recognize the growth potential for Uber's business, we remain more confident in Lyft given its more focused business model", Hussain said.

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