The first flotation of a ride hailing business, expected in early 2019, will give an exit to a range of corporate investors and will move this business model into public markets.
US-based ride hailing service Lyft has reportedly filed for an initial public offering (IPO) which is expected to take place in the first half of 2019. Financial services firms JPMorgan Chase, Credit Suisse and Jeffries are among the underwriters for the offering but details about its potential size were not revealed. The company was last valued at $15.1bn after a $600m round in June 2018, led by financial services group Fidelity Management and Research and also backed by hedge fund Senator Investment Group. The IPO would constitute an exit to a number of corporate investors, including Fidelity, internet conglomerate Alphabet’s growth equity unit CapitalG, internet group Tencent, e-commerce firms Rakuten and Alibaba, automotive components producer Magna International, carmakers Jaguar Land Rover and General Motors, conglomerate Icahn Enterprises as well as its China-based peer Didi Chuxing.
Founded in 2007 and having raised over $4bn in funding to date, Lyft runs an on-demand ride service in the US and in nine cities across the Canadian province of Ontario. It claims to have provided more than 375 million rides for a total of more than 23 million unique passengers in 2017.
Lyft’s IPO will be the first of a sharing economy ride-hailing business that has contributed to the disruption of the ride hailing sector. Its rival Uber is also rumored to have intensions to go to public early next year. Moving into public markets will be major milestone for proving the long-term viability of this ride-hailing business model, on which much capital has been wagered. As shown on the GCV Analytics historical bar chart below, billions of dollars have been poured in corporate-backed funding rounds of such business around the globe over the past five years.