US-based, corporate-backed ride hailing services Uber and Lyft have both moved closer to initial public offerings at substantial valuations, according to media reports yesterday.
Uber’s app-based on-demand ride service is currently operating in more than 80 countries and it has expanded into adjacent areas such as food delivery and freight trucking services. CEO Dara Khosrowshahi said last month the company is aiming for a 2019 flotation.
Investment banking firms Goldman Sachs and Morgan Stanley are both bidding for an underwriter spot, and delivered valuation proposals last month suggesting Uber could be valued at up to $120bn in its IPO, the Wall Street Journal reported, citing people familiar with the matter.
The proposed valuation would be $48bn more than that at which the company received $500m from automotive manufacturer Toyota two months ago. Goldman Sachs and Morgan Stanley were both touted as possible underwriters for the IPO by Reuters in August this year.
Uber has secured a total of almost $13.3bn in debt and equity financing from investors also including telecommunications firm SoftBank, media groups Axel Springer and Bennett Coleman & Co, internet company Baidu, software provider Microsoft and GV, a subsidiary of internet technology conglomerate Alphabet.
The offering is being explored as the company considers possible acquisitions of Middle Eastern rival Careem and food delivery service Deliveroo.
Lyft has meanwhile selected investment banking firm JP Morgan to lead an initial public offering slated for early 2019, people familiar with the matter told CNBC, with one adding that it expects to maintain the $15.1bn valuation at which it last raised money.
The valuation was secured in a $600m round led by Fidelity Management and Research in June this year. Lyft has received $4.4bn in equity funding altogether, from investors including Alphabet, carmaker General Motors, auto components supplier Magna International and e-commerce firms Alibaba and Rakuten.
JP Morgan’s position in the Lyft IPO means it will not seek a position in the Uber flotation, the sources told CNBC. Lyft is expected to go public before Uber, but the latter’s banks have suggested it could pursue an IPO earlier than the late 2019 time frame it has set.
