On Thursday, Lyft filed a confidential draft registration statement with the Securities and Exchange Commission to go public perhaps beating its much larger competitor Uber. The initial public offering could come early next year. This may give Lyft an advantage over its competitors.
Santosh Rao, the head of research at the merchant bank Manhattan Venture Partners told Business Insider, “Lyft has the clear early-mover advantage, and they will definitely get the benefit of the doubt. No one knows how to value these companies. Is it a software company? Is it a car company? Is it a service?”
Business Insider has also reported, “Rao, who specializes in late-stage, pre-IPO company research, says the most accurate comparison is to platform companies, such as Etsy or Alibaba. Based on these multiples, Rao’s firm estimates a fair value of Lyft to be $19 billion to $20 billion.”
Bloomberg reported, “As a private company, Lyft has hit a valuation of $15 billion. That could increase as high as $30 billion.”
However, companies like Lyft and Uber have shown to be deeply unprofitable with Uber losing nearly USD 1 billion within the last quarter of 2018.
Here are the important numbers according to Business Insider:
Revenue: USD 2.95 billion, up 38% from the previous year.
Adjusted net loss: USD 939 million, up 38% from the previous quarter.
Gross bookings: USD 12.7 billion, up 34% from the previous year.
And although the revenue is up 38% from the previous year, it is much less than the 63% year-over-year jump in the second quarter of 2018 according to WSJ. The numbers show widening losses and slowing growth.
Lyft was not profitable either. The company brought in USD 563 million in revenue during the third quarter of 2018, which was up almost double from USD 300 million the year before, but the company has an increase of losses, which were up from USD 195 million to USD 254 million.
Lack of profitability and uncertain of how to exactly categorize the company, no one is certain on the valuations.
Rao acknowledged that, “no one knows the exact economics of it. There is a whole range of estimates out there. Some people estimate autonomous vehicles will totally revolutionize the benefit and make 70% of their costs go away, but that is still way out.”
WSJ reported that Lyft has chosen Nasdaq to list the company’s shares and according to Bloomberg, Lyft has enlisted JPMorgan, Jefferies, and Credit Suisse to assist with the IPO. Lyft did not elaborate on pricing, number of shares, or targeted valuation and the information may come after the SEC completes its review.