Ride-hailing Company Lyft Inc. on Thursday filed confidential paperwork with the U.S. Securities and Exchange Commission for its initial public offering, a key step that keeps the firm on pace to hit the public market early next year.
Lyft’s IPO is one of Silicon Valley’s most anticipated debuts in recent year. Its confidential filing indicates it likely remains a step ahead in the race against rival Uber Technologies Inc., as both firms accelerate towards IPO’s in 2019.
Lyft is expected to debut in March or April, according to people familiar with the matter. By filing with the SEC now, the Company will have time to answer questions from the agency in the coming months and stick to that potential time frame.
The IPO will be a test of how public investors will value ride-hailing companies such as Lyft and Uber. Firms in the industry have received vast amounts of money from private investors at high valuations but still require additional capital as they generate big losses.
After a blockbuster 2018, next year is shaping up to be a strong one for IPOs, with big names like Lyft, Uber, Slack Technologies Inc., and potentially Airbnb Inc. and Palantir Technologies Inc. making debuts.
In October, the Wall Street Journal reported that Lyft had picked its underwriters for the offering. The firm’s valuation is expected to top the USD 15.1 Billion it was valued at earlier this year. Meanwhile, Uber, has received proposals from bankers that value it as high as USD 120 Billion. Companies often consider such proposals before hiring IPO underwriters.
Uber Chief Executive Officer Dara Khosrowshahi has said the Company would aim to go public in the second half of 2019. But the IPO could come sooner, as Uber looks to tap a robust market for public offerings. Uber’s pitch to investors will likely seek to distinguish the Company from Lyft by emphasizing its global nature, with a presence in 63 countries, and the platform nature of the business. Khosrowshahi has pointed to its Uber Eats food-delivery service as a key example of how Uber can use its existing network to rapidly grow new ancillary businesses.
Lyft makes money by taking a commission on rides booked through its app. It posted third-quarter revenue of USD 563 Million, up 88% compared with the year-earlier period, with a loss of USD 254 Million in the quarter.
In November, Uber said its third-quarter revenue rose 38% to USD 2.95 Billion, and it posted a loss of USD 1.07 Billion.
Uber has weathered a series of scandals, including claims of workplace sexual harassment and the alleged theft of trade secrets from rival Alphabet Inc. (NASDAQ: GOOGL). Khosrowshahi has sought to win back investors, drivers and riders amid growing competition.