Uber seeks valuation of up to $90bn at IPO

Ann Santiago
April 29, 2019

If all goes well for Uber, its IPO will yield a total valuation of $90bn (£70bn), which is still lower than analysts had originally predicted.

Uber also said PayPal had agreed to purchase $500 million of stock in a private placement at the price the IPO eventually settles at.

Uber is nearing a record $8-$10 billion initial public offering, following ride-hail service rival Lyft Inc.

Even so, Uber is on track for one of the largest IPOs in history.

Based on the above, Uber is expected to set out an IPO price range of between $44 and $50 for each share, which would allow it to raise between $8bn and $9bn. It would rank Uber's IPO as the ninth largest on a US exchange and the biggest since Alibaba Group Holding Ltd.'s record $25 billion listing in 2014.

"We will not shy away from making short-term financial sacrifices where we see clear long-term benefits", said chief executive Dara Khosrowshahi as he unveiled the results earlier this month. Uber in 2018 had $11.3 billion in revenue, up around 42 percent over 2017, but below the 106 percent growth the prior year.

That rapid growth has continued this year. As of the end of 2018, only 2% of people in the 63 countries where Uber operates used its services, Uber said. Reuters reported earlier this month that the combined value of Uber shares sold in the IPO could be around $10 billion. It lost roughly $1 billion in the first quarter of 2019 on revenue of about $3 billion.

While Lyft is primarily a domestic ride-sharing business, Uber is building a ride-sharing platform that it can also use to monetize its freight and food delivery businesses, Ives said. Uber had previously given documentation to holders of its convertible notes outlining a potential price of $48 to $55 a share, which would have been a valuation between $90 billion and $100 billion on a fully diluted basis.

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