To prepare for its upcoming initial public offering next week, ride-hailing company Lyft has now launched a massive road show for investors. The company is encouraging investors to help it reach its goal of US$20 billion for its IPO. Lyft is reportedly aiming to increase its valuation to more than US$20 billion with the IPO.
The investor roadshow will be showcasing the company's existing platform and planned international expansion to entice investors to make large bets on its IPO. However, that may be harder than it sounds as Lyft's main rivals have also announced their own IPO launches within the year. Uber Technologies had previously announced plans to go public next month. Some investors will likely want to hold on to their money for Uber's IPO, and Lyft will have to convince them otherwise.
Prior to officially pricing its IPO, Lyft will be going around the county to meet with potential investors. According to reports, Lyft will be selling itself as a dedicated ride-hailing service that has poured all of its resources into a particular industry. The company has repeatedly emphasized to investors its uncomplicated business model and how it does not have any plans to complicate it through diversification. Its major rivals, Uber and Grab, have recently expanded into different services, which include food delivery and personalized hauling.
Lyft reportedly plans to use the bulk of its new funds to subsidize rides to attract new users to its platform. The rest of the money will then be invested in various research and development efforts that will include autonomous driving technology.
Compared to Lyft, Uber reportedly has a higher target for its IPO. The company apparently wants to be valued somewhere around US$120 billion after it goes public. However, Lyft may have an advantage given that it is the first to offer its company's shares to the public. Lyft will be the first ride-hailing company to debut on the United States' public market. Other Silicon Valley startups planning to go public this year include Pinterest and Slack Technologies.
In 2018, Lyft reported revenue of US$2.16 billion and a loss of US$911 million. The company expects to incur larger losses in the coming years given its planned international expansion. Unlike its competitors, Lyft currently only operates in North America. Meanwhile, Uber operates several business units in places such as Russia and Southeast Asia. The company is currently operating in over 785 metropolitan areas across the globe. In 2018, Uber reported revenues of over US$11.3 billion and a loss of US$3.3 billion, excluding its gains from the sale of some of its international units.
