$23B Valuation for Lyft IPO This Month

March 18, 2019
944 Views

On-demand ride company Lyft will reportedly go public this week, with a valuation between $21 billion and $23 billion. Lyft’s stock market entry will be one of the first major IPOs this year. It could help to invigorate what has so far been an underwhelming IPO market in 2019.

Lyft is a direct competitor to Uber, an on-demand ride hailing company that is also expected to go public this year.

Lyft Expects to Raise $2B in IPO

Analysts believe that the initial public offering could come as early as this month. The valuation equates to around $62 – $68 per share. The IPO is expected to raise $2 billion for the company. Lyft is reportedly still feeling the market, and the price at launch will take investor feedback into account.

It was previously valued at $15.1 billion as a private company at the start of 2018. A valuation above $21 billion shows that there is high confidence and demand for this IPO.

What is Lyft?

Lyft is the second largest ride hailing company in North America. It operates solely in the United States and Canada, although an international expansion is possible as the company continues to grow.

The company generated $2.16 billion in revenue during 2018, more than double from the previous year. It controls almost 30% of the ride hailing market.

Key services include:

  • Shared ride hailing, standard ride hailing, and large vehicle ride hailing (6+ passengers).
  • Luxury ride hailing with highly rated drivers, including a large SUV (6+ passengers) service.

Shares Will be Priced After March 28th

Final prices are expected to be determined after March 28th. It is currently running a roadshow to promote its IPO to hedge and mutual funds in New York and other major U.S. financial centers.

Lyft is an innovative company that has the potential to grow in the United States and in overseas markets. Smartphone-based ride hailing is increasing in popularity, particularly in large cities and in developing nations.

An investment could provide exposure to a unique segment of the growing technology market. While Lyft shares could take months or possibly years to become profitable for long-term investors, there’s still enough potential to make them an attractive option.

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