This week gave us the answer to a question that’s been popping up a lot as 2018 comes to a close: Which of the household name tech unicorns will be first out of a gate with their announced 2019 IPO?
Airbnb, Slack, Palantir and Uber were all in the running — with the oft-heard Instacart rumor here and there — but as of yesterday Lyft now could be in the lead position, as the ridesharing service has filed a draft registration with the U.S. Securities and Exchange Commission (SEC).
Subsequent steps now include a review by the SEC prior to listing. According to sources cited by Reuters, the IPO is slated for early 2019, likely soon after the SEC review is complete.
The IPO announcement comes after a very busy back-half of 2018 for Lyft, which has spent the last few months rolling out offers and services to attract riders and drivers to its platform as it prepares for it forthcoming IPO.
In October Lyft ran its “Ditch Your Car” promotion, offering passengers transportation credits if they give up their cars for 30 days.
“We are on the brink of a massive shift in personal transportation, moving away from car ownership and into transportation as a service. Ditch Your Car is an extension of the mission we’ve been committed to for over a decade,” Co-Founder and President John Zimmer said in a press release.
In that same month the firm also announced its $72 million acquisition of augmented reality firm BlueVision. According reports, Blue Vision will be part of Lyft’s Level 5 self-driving car unit led by Luc Vincent, and the company and its staff of 39 will become the anchor for a new R&D lab in London. Blue Vision’s technology includes street-level mapping and interactive augmented reality that enables two people to see the same virtual objects.
“We are looking forward to focusing Blue Vision’s technology on building the best maps at scale to support our autonomous vehicles, and then localization to support our stacks,” Vincent said in an interview. “This is fundamental to our business. We need good maps and to understand where every passenger and vehicle is. To make our services more efficient and remove friction, we want their tech to drive improvements.”
BlueVision was actually the firm’s second biggest acquisition in the second half of 2018 — in July Lyft picked up CityBike owner Motivate for $250 million.
Lyft also recently rolled out its first ever subscription program for riders. Called the All-Access Plan, Lyft’s new subscription service lets passengers pay upfront every 30 days to lock in a set price for their rides. The subscription service offers consumers 30 rides (up to $15 each) when they pay one monthly price of $299. The subscription service can be canceled at any time, according to the blog post that announced the service, saying, “This is the first step toward delivering on our goal of making car ownership optional, and we’re constantly looking for more ways to provide passengers with the easiest, most convenient options possible.”
In addition to getting 30 rides for $299 a month, users get 5 percent off additional rides, Lyft noted in the blog post.
Uber, Lyft’s main rival, is also expected to pursue an IPO next year that could value it at about $120 billion. What valuation Lyft is targeting for its IPO remains unknown — as of its last fundraising round in early summer 2018 the firm was valued at $15 billion. The current assumption is that Lyft will seek to command a higher valuation from its IPO.
And overall value is one of many unknowns about the upcoming IPO. There are still no official details on how many shares are being offered or the price range that is expected. There is also some concern among investors that recent weakness and uncertainty in the markets could result in reduced interest in the firms or they might fail to fetch a reasonable valuation.
“Market declines mean that the offer price will be lower than otherwise. But there’s a danger of waiting to go public as well — markets could go even lower, and the companies could raise less money if they waited longer,” Jay Ritter, an IPO expert and professor at the University of Florida, told Reuters.
Lyft has chosen JPMorgan Chase & Co., Credit Suisse and Jefferies as underwriters for its IPO, and while there are some concerns like those voiced by Ritter, Lyft has been mostly praised for its move to get out ahead of the tech pack in 2019.
Lyft, though much smaller than Uber, reports note, hasn’t had the PR problems Uber has had in the last year and has managed to grab a lot of the IPO thunder with its move to get started with its 2019 transition to the public markets as quickly as possible.
How well that IPO does will likely be the topic of another Sizzle/Fizzle edition in 2019. But for now, getting everyone’s attention — and reviewing Lyft’s greatest hits thus far — is enough to slingshot it to the front of the pack, and earn this week’s sizzle.
Sizzle
Holiday Spending: Gets a strong start so far this year as retail spend growth gains 7.5 percent for Thanksgiving and Black Friday year over year. First Data tallies also saw +20 percent growth for five categories year over year, including electronics and some subsets of specialty retail.
India SMBs: See a rebound in the wake of demonetization, says an Amex and Oxford Economics report, as they continue to “demand enhanced financial services” tied to digital payments, feel confident about revenue growth and the economy overall.
Order Ahead: Pizza Hut is shifting its focus to order-ahead delivery and has bought order-ahead platform QuikOrder, which offers online software and services for the restaurant industry. Pizza Hut has said this is its largest acquisition to date, and is speeding up its digital efforts across thousands of locations.
Fizzle
Postal Wars = Higher Fees for Amazon: The holidays are here and billions of packages are crossing air, land and sea. A Treasury task force has said that the U.S. Postal Service should charge more for some commercial deliveries, which ups the ante against Amazon, which uses the U.S. postal service for 45 percent of its deliveries.
Marriott Breach: 500 million Starwood customers are hacked and it’s too soon to say just how much it all will cost. Some analysts peg legal fees and fines in the hundreds of millions of dollars — and counting.
Huawei: Gets a double barrel of bad news, as its CFO is arrested in the U.S. on criminal charges, as the firm has allegedly violated sanctions against Iran. Separately, in the U.K., telecom BT Group has said it will rip out Huawei equipment from its existing 3G and 4G networks.
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