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Lyft pulled off a major surprise on Thursday as it filed for an IPO draft with the U.S. Securities and Exchange Commission (SEC), according to a press release issued by the company. Lyft didn’t disclose the exact timing of its IPO, but news agency Reuters claim that the IPO may hit the market during first half of the next year – almost months before market will be greeted with Uber’s IPO.
Uber’s smaller rival, which is valued approximately at $15 bn, reportedly did not mention in its confidential filing the exact number of shares it proposes to offer and also the estimated price range.
Lyft may indeed be tempted to go for an early IPO in the next year given that the U.S. market has been pretty choppy this year and this trend is expected to continue in the next year as well. While a deep-pocketed company like Uber may able to pull off a decent IPO even in a weak market, exactly same cannot be said about its small rival Lyft.
On a broader perspective, both Uber and Lyft’s IPO next year will test investor’s appetite for high profile unicorn tech startups that are actually loss-making companies. Both ride-hailing companies have taken a huge hit on their bottom lines in order to enter newer markets and capture bigger market share. Although both have been able to steam off their rising losses, they are still far from being a standalone profitable company.
Uber and Lyft’s IPO may also very well turn out to be a major watershed moment for the cab-hailing industry, since both companies will end up with huge war chest post their IPOs. In all likelihood, the market share war between Uber and Lyft may intensify further.
