Uber, the US-based on-demand ride service backed by a range of corporate investors, will raise $8.1bn when it floats on the New York Stock Exchange today.
The company priced 180 million shares at $45.00 each yesterday, near the foot of the $44 to $50 range it set late last month. It is the largest initial public offering since e-commerce firm Alibaba raised $25bn in 2014, and values Uber at $82.4bn.
Digital payment services firm PayPal is buying an additional $500m of shares through a private placement, while the offering’s 29 underwriters have a 30-day option to acquire a further 27 million shares, which would lift the size of the IPO to more than $9.3bn.
Founded in 2009, Uber operates a ride hailing platform with 91 million monthly active users that ties into adjacent services such as food and freight delivery. It recently spun off its autonomous driving subsidiary, Uber ATG, with $1bn of external funding.
The company made an operating loss of more than $3bn in 2018, from almost $11.3bn in revenue, but that loss was offset by the divestments of regional subsidiaries in Eastern Europe and Southeast Asia.
Although it floated at the lower end of the range, Uber can point to general market turmoil surrounding the long expected comfirmation that the US will hike import tariffs on an estimated $200bn of Chinese products.
However, a person familiar with the matter told Bloomberg the company had chosen shareholders likely to hold on to the stock instead of selling quickly. It hopes to avoid the fate of chief rival Lyft, whose shares have fallen almost 25% since it floated in March 2019.
The IPO follows some $10.5bn in equity funding (and for a full rundown, check our article here). Uber most recently raised $1.25bn from telecommunications firm SoftBank’s Vision Fund, TPG and Dragoneer in late 2017 at a $68bn valuation, alongside a $7.2bn purchase of secondary shares at a $48bn valuation.
Media group Axel Springer had supplied an undisclosed amount of funding for the company in April 2017 which came in the wake of a $3.5bn investment by Saudi Arabian sovereign wealth fund Public Investment Fund (PIF) in mid-2016 that valued it at $62.5bn.
Automotive manufacturer Toyota provided $500m of funding for Uber in August 2018 that was latterly switched to Uber ATG, but it had invested an undisclosed amount in Uber itself earlier in 2016.
Media company Bennett, Coleman & Co’s Times Internet subsidiary made a strategic investment in Uber in 2015 that was likely rolled into a $1bn round that also featured software provider Microsoft ,later the same year.
Uber had already received $2.8bn in series E funding earlier in 2015, with internet group Baidu committing $600m, alongside TPG, Fidelity Investments, Sequoia Capital, Kleiner Perkins Caufield & Byers (KPCB), Menlo Ventures, New Enterprise Associates, Qatar Investment Authority, Valiant Capital Partners, Lone Pine Capital and Wellington Management.
GV, the subsidiary of internet and technology group Alphabet then known as Google Ventures, had joined Fidelity Investments, Menlo Ventures, Wellington Management, KPCB, BlackRock and Summit Partners in Uber’s $1.2bn series D round in 2014, which closed at an $18.2bn post money valuation.
The company secured $361m the year before, in a series C round in which GV invested $258m and private equity group TPG and venture capital firm Benchmark also took part.
Benchmark was among Uber’s early backers, as were Goldman Sachs, Founder Collective, Lowercase Capital, First Round, Bezos Expeditions, Menlo Ventures and various angel investors. Its other shareholders include investment bank Citic Bank, LetterOne, Hillhouse Capital, Data Collective, CrunchFund and Innovation Endeavors.
Vision Fund is Uber’s largest shareholder, though it is selling $245m of shares in the offering, diluting its stake from 16.3% to 12.8%, while Alphabet’s will be cut from 5.2% to 4.2%. Benchmark is selling $259m of shares and will have an 8.5% share post-IPO, while PIF will be the owner of a 4.2% stake.
Morgan Stanley, Goldman Sachs and BofA Merrill Lynch are lead book-running managers for the IPO. Barclays, Citigroup and Allen & Company are book-running managers while RBC Capital Markets, SunTrust Robinson Humphrey, Deutsche Bank Securities and HSBC are joint book-running managers.
The IPO’s co-managers are SMBC, Mizuho Securities, Needham & Company, Loop Capital Markets, Siebert Cisneros Shank, Academy Securities, BTIG, Canaccord Genuity, CastleOak Securities, Cowen, Evercore ISI, JMP Securities, Macquarie Capital, Mischler Financial Group, Oppenheimer, Raymond James, William Blair, Williams Capital Group and TPG Capital.
