On March 18, ride-hailing app Lyft put its initial public offering (IPO) in motion, signalling its intention to raise up to $2.1bn – a figure that would value the company at almost $23bn. The IPO looks set to be one of the largest listings from a US technology firm in recent years and is expected to rival that of Snap, which went public in 2017.
The benchmark has now been set for other tech companies preparing to go public this year. Pinterest, Postmates and Slack are all pushing for IPOs in 2019, providing a timely reminder of the strength of Silicon Valley’s start-up ecosystem, which has recently begun to stall in the face of increased competition from other tech hubs in Toronto and Tel Aviv, among others.
Lyft’s IPO looks set to be one of the largest listings from a US technology firm in recent years and is expected to rival that of Snap
Lyft’s competition with main rival Uber, however, is likely to be of the most interest to the ride-hailing firm. Uber is expected to draft its own IPO disclosure next month, with analysts predicting that its listing will be significantly bigger than Lyft’s, potentially reaching as high as $120bn.
Lyft’s stock, which will be listed on the Nasdaq Stock Market, has a proposed share price of between $62 and $68. If the latter is achieved, it would see the stakes of Lyft’s two co-founders, Logan Green and John Zimmer, surge to around $569m and $393m respectively, despite the business making a net loss of $911.3m since its founding in 2012.
But just as Lyft officially revealed its IPO, the business experienced a setback in a New York court, as a judge denied the company’s motion for an injunction that would have blocked the city’s recently approved minimum wage pay floor for app-based drivers.
Since their founding, both Lyft and Uber have been blighted by legal disputes with drivers who are unhappy with their wages and employment rights. Recently, Uber was forced to settle a $20m lawsuit with drivers in California and Massachusetts, and further litigation is expected to follow. The judge overseeing Lyft’s New York City dispute is expected to deliver a written statement within the next 30 days; an unfavourable ruling could potentially harm Lyft’s ambitious stock price.