By Farhat Chowdhury Zishan
No matter where we are on earth, we all have the slightest notions of the mighty tech boys in Silicon Valley, their conquest in creating the perfectly molded tech-bubble and all the life-altering, paradigm shifting startups that have been surrounding us for the last decade. Uber, Lyft, Snapchat – you name it, the big platforms that have had a lasting impact on our everyday lifestyle. So where are they headed now? Wall Street!
Yes, many of these already have gone public. And some are supposedly about to join the list this year. Lyft and Uber have been leading the race; until now as Lyft gets one step closer to winning the race and ‘lifting’ the title.
The information was laid out on 1st March by Lyft in a public filing with the Securities and Exchange Commission as part of the company’s push towards an IPO. The fact was unearthed that the company filed for an IPO last year in December. In its latest filing, Lyft said that it controlled 39% of the U.S ride-sharing market by December 2018. They seemed to have been performing much better, compared to 22% market share of 2017. The revenue numbers seem to be full of optimism as well; with the company marvelously doubling its revenue to $2.2 billion in 2018 from a mere $1.1 billion in 2017.
Lyft has had a great run last year in terms of operating and serving their customers. The transportation tech giant has transported approximately 18.6 million riders on 6 billion trips last year. But Lyft also reported that it had lost $911.3 million last year. And while the numbers of users and rides grew, the pace of that growth over the past two years steadily slowed. Lyft’s total number of rides grew 26% between the first two quarters of 2016 although the growth has become stagnant over a period of two years; halting down at 10% over the same period. During the same time in 2018, that had slowed down to 11%. Even so, Lyft says it has a plan to gain ground against its competitors—the main one being Uber, which has also confidentially filed in December for an IPO. Uber’s paperwork has yet to become public.
Lyft says it would benefit from a better reputation than its rivals and a greater brand strength—a subtle dig at Uber, which has been plagued by scandals of its own making over several years. For example, Uber’s former CEO Travis Kalanick was blamed for creating a sexist workplace culture and keeping employees aboard who had been accused of crossing the line. The company has faced several media backlashes for being accused of spying on Lyft, having brawls with regulators and the highly controversial issue of attaining the medical reports of a woman raped by an Uber Driver in India.
On the other side of the coin, Lyft has managed to maintain a completely contrasting image of themselves.
The company often mentions that it has an ‘uplifting’ culture; which has been a ‘key differentiator’ from other ride-hailing companies. Besides, they have also shown signs of expansion as they have started to weigh in their bets onto bike and scooter rental services for future growth prospects. To take this a notch farther, the company also has plans of augmenting their business scope by introducing autonomous vehicles. Lyft has reportedly partnered up with Aptiv, a global auto parts company, to serve more than 35,000 rides in Las Vegas. The endeavor has not just ended here; there’s rumor that Lyft is also building their very own autonomous vehicles.
In the filing, Lyft said it hoped to raise $100 million in the IPO, but that was merely a placeholder. According to the industry veterans, the IPO has a high chance of taking place by the end of March.
However, it’s not just Lyft; other startups have also started to gear up to prepare for their own IPO filing.
Airbnb
The home-sharing company just have demonstrated a telltale sign of a company thinking about going public. According to Augusiak-Boro, Senior Research Associate at EquityZen – an investment company, Airbnb made a “big-time CFO hire” in November when it poached longtime Amazon executive Dave Stephenson to take on the role of finance chief. The company said that the most recent period was the “strongest quarter in Airbnb history” and the first in which the company logged upward of $1 billion in revenue. However, a source close to Airbnb has stated that the company has yet not decided about their IPO but are likely to join the Wall Street some time next year.
Another media hub, Recode, reported that Airbnb was considering a direct listing, similar to what Spotify Technology SA SPOT, -1.53% did earlier this year when it eschewed a traditional offering and didn’t raise money through the process of going public. “A direct listing for Airbnb could make sense, as it fits the Spotify profile — a cash-flow-positive startup with broad market appeal and a more easily understood business model,” wrote Risun Udawatta, a research associate at Equity Zen.
Palantir
Ultra-secretive security firm Palantir Technologies Inc. has been known for quite a while to create a stir regarding IPO listing, but they haven’t taken any active approach towards getting enlisted as of yet. Still many of the analysts are claiming that 2019 might be the year when Palantir decided to release their stocks out in the open for good. There has been quite an uproar regarding this; and Palantir’s getting into conversations with both Morgan Stanley and Credit Suisse has further solidified the claim of Palantir issuing IPO by 2019.
An October 2015 funding round valued the company at $20 billion, according to the Journal, and the company hasn’t raised money since. “Palantir is making very solid progress from service-oriented government contracts to more enterprise, software-as-a-service revenue,” Kulkarni said.
According to a CNBC report, the $12.3 billion photo-sharing company is expected to go for IPO in mid-2019. However, experts have chalked out the fact that Pinterest will have to go the extra mile in order to win investors’ heart as the data-sharing concerns of similar companies (e.g. Facebook) are still predominant in the minds of mass audience.
