Lyft valued at $24.3 billion in first ride-hailing IPO

Ann Santiago
March 30, 2019

The offering also fulfilled a key strategic goal for Lyft: beating larger rival Uber to the market. Uber has been told by its investment bankers that it could be valued at as much as $120 billion.

"With Uber and Lyft becoming public companies, shareholders will expect them to rationalize prices on rides towards sustainable levels", said Paul Hudson, founding partner at Glade Brook Capital Partners.

The IPO is expected to be one of the largest since the 2014 offering by Chinese e-commerce giant Alibaba and the largest since the March 2017 IPO of Snap, which raised around $3.4 billion and valued the messaging company at about $33 billion.

Lyft said in a statement that it priced 32.5 million shares Thursday at US$72 each. Although Zimride wasn't quite the same concept as it was more of a solution for city-to-city rides and longer trips, it later morphed into an Uber-like concept, officially changing its name to Lyft in 2013. It's the first of several tech IPOs expected this year.

The big test was underway Friday as the company's stock begins trading on the Nasdaq exchange under the ticker symbol "LYFT".

Lyft's IPO was oversubscribed just two days into its investor roadshow, Reuters reported last week.

Lyft said in filings that its total bookings reached US$8.1 billion a year ago, with 1.9 million drivers providing rides to nearly 31 million customers in the USA and Canada.

These firms, which are stepping up moves to autonomous rides, have been expanding aggressively - with Lyft gaining market share in the United States and Uber in dozens of worldwide markets. The IPO has significantly lifted the value of Lyft from its previous valuation of $15.1 billion.

It's increased its share of the ride-sharing market in the U.S. It posted a loss of US$911 million in 2018 versus US$688 million in 2017.

Shares of the second-largest ride-hailing company jumped about 20 percent in initial trading to $85.48 as of noon in NY.

Lyft's co-founders Logan Green and John Zimmer have structured the shares so that together they will hold 49 percent of the voting power, enough to substantially influence major decisions. Indeed, Lyft has acknowledged it may be many more years before it starts making money, especially if its efforts to lower costs by developing a fleet of self-driving cars don't pan out.

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