Ride-hailing giant Uber filed its IPO paperwork with the US Securities and Exchange Commission yesterday, as it reportedly seeks to achieve a valuation of $100bn – lower than the $120bn estimated value its bankers attached to the company in 2018.
The San Francisco-based firm's stock will trade on the New York Stock Exchange within weeks, and despite the lower-than-expected valuation, its valuation dwarfs that of rival Lyft, which was valued at $20bn when it posted its paperwork two weeks ago. Shares of Lyft opened at $87.33 on March 29, but closed at $61.01 on April 11, marking a 30% decline.
According to the Wall Street Journal, Uber expects to raise around $10bn, and plans to sell at least $1bn of shares initially. Uber reported 2018 revenues of $11.27bn, but the IPO positing revealed a loss of $1.85bn for the year. The company, which operates in 65 countries and also operates meal-delivery service Uber Eats and shipping service Uber Freight, warned that operating expenses would increase as the company goes public.
"We have incurred significant losses since inception, including in the US and other major markets," stated the company in its S-1 filing with the Securities and Exchange Commission. "We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability."
Uber's revenues jumped 42% last year to $11.3bn, and despite announcing losses of $1.8bn when adjusted for expenses including discontinued operations, the company did claim a $997m net income in 2018, compared with a $4bn loss in 2017. Ridehail-related revenue climbed 33% to $9.2bn for the year.
According to Uber's IPO prospectus, Google parent Alphabet owns a 5.2% stake in the ride-sharing company. Six years ago, Google made the largest venture investment at the time when it gambled $258mn on the ridesharing firm, which has since multiplied by about 20-fold.
In its S-1 registration statement, Uber warned that the markets in which it competes have attracted "significant investments from a wide range of funding sources", meaning many of its competitors would continue to be highly capitalized.
"Moreover, certain of our stockholders, including SoftBank (our largest stockholder), Alphabet and Didi, have made substantial investments in certain of our competitors and may increase such investments, make new investments in other competitors, or enter into strategic transactions with competitors in the future," the company stated.