San Francisco ride-sharing firm Lyft announced today the launch of its initial public offering (IPO). The company will be listed on the Nasdaq under the symbol LYFT, and is offering 30,770,000 shares of its Class A common stock, plus up to an additional 4,615,500 shares that the underwriters have the option to purchase. The initial public offering price is expected to be between US$62.00 and $68.00 per share.
At these prices, the company is hoping to raise approximately $2.1bn in capital and reach a market valuation of $23bn. According to a report by the Financial Times, “the filing gives the first indication of what ride-sharing companies could be worth in the public markets. Lyft’s IPO is expected to be followed by a public listing from its larger rival Uber as soon as next month, which may fetch a market valuation topping $100bn.”
J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Jefferies LLC, UBS Securities LLC, Stifel, Nicolaus & Company, Incorporated, RBC Capital Markets, LLC and KeyBanc Capital Markets Inc. will act as book-running managers for the offering.
According to a CNN report, other tech startups Airbnb, Slack, Pinterest and Postmates are also expected to file IPOs in 2019. Leading the pack, Lyft is expected to function as a litmus test for the health of tech investment for the year. All are considered "unicorns" or start-up private companies worth more than $1 billion.
"The unicorns of today have been staying private for much longer than the norm because of the availability of capital from sovereign wealth funds and big companies like Fidelity," said John Mullins, an associate professor of management practice in entrepreneurship at London Business School to CNN. "But at some point, you have to go public. Investors want a return. That's why we're seeing this rash of impending IPOs."