Lyft valued at $24.3 bn in first ride-hailing IPO

NEW YORK: Lyft Inc was valued at $24.3 billion in the first initial public offering (IPO) of a ride-hailing start-up on Thursday, raising more than it had set off to do as investors overlooked uncertainty over its path to becoming a profitable company.
Lyft’s IPO sets the stage for the stock market debut of larger rival Uber Technologies Inc, which Reuters has reported will kick off in April. Uber has been told by its investment bankers that it could be valued at as much as $120 billion.
The success of the IPO came despite Lyft’s steep loses, criticism of its dual-class share structure and some concerns over its strategy for autonomous driving, for fear of missing out on the company’s strong revenue growth.
“In a good market, people look beyond things. They don’t see the problems as much,” said Brian Hamilton, co-founder of data firm Sageworks, speaking before the pricing.
The ride-hailing industry is expected to grow rapidly in the coming years, as young millennials in big cities choose not to buy their own car. Yet the sector is fraught with questions about the future of automated driving, regulatory pushback and legal challenges over drivers’ pay and benefits.
Lyft’s valuation makes it the biggest company to go public since Alibaba Group Holding Ltd in 2014. It paves the way for other Silicon Valley companies seeking to float in the stock market this year, including Pinterest Inc, Slack Technologies Inc and Postmates Inc.
Lyft raised $2.34 billion its IPO. It said it priced 32.5 million shares, slightly more that it was offering originally, at $72, the top of its already elevated $70-$72 per share target range. Lyft started its IPO investor road show earlier this month with a target range of $62-$68 per share. — Reuters