SAN FRANCISCO • Ride-hailing company Lyft beat bigger rival Uber Technologies in filing for an initial public offering (IPO), defying the recent market jitters and taking the lead on a string of billion-dollar-plus tech companies expected to join Wall Street next year.
Lyft's IPO will test investors' appetite for the most highly valued Silicon Valley companies and for the ride-hailing business, which has become a wildly popular service but remains unprofitable, and has an uncertain future with the advance of self-driving cars.
San Francisco-based Lyft, last valued at about US$15 billion (S$21 billion) in a private fund-raising round, did not specify the number of shares it was selling or the price range in a confidential filing with the US Securities and Exchange Commission (SEC) on Thursday.
Lyft could go public as early as the first quarter of next year, based on how quickly the SEC reviews its filing, people familiar with the matter said. Lyft's valuation is likely to end up between US$20 billion and US$30 billion, one source added.
Lyft, set up by entrepreneurs John Zimmer and Logan Green in 2012, has raised close to US$5 billion from investors. While it continues to grow faster than its larger rival, Uber, it is also losing money.
Lyft would follow a string of high-profile IPOs of technology companies valued at more than US$1 billion this year, such as Dropbox and Spotify Technology.
But market turmoil fuelled by the escalating trade tensions between the US and China could dampen enthusiasm for the debuts of other 2019 hopefuls such as apartment-rental service Airbnb, analytics firm Palantir Technologies, and digital payment company Stripe.
Including Lyft, these round out four of the top 10 most highly valued, venture-backed tech firms.
"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," said IPO expert Jay Ritter from the University of Florida.
Such fears have pushed some companies to hustle. Uber moved its target IPO date up from the second half of next year to the first half. Some venture capitalists said they are urging portfolio companies that are planning a public debut in the next 18 months to hurry up and file.
In a key test for the US IPO market, Moderna is considering selling up to 20 per cent more shares than first planned, allaying concerns that the stock market tumult could derail the biggest flotation of a biotechnology firm since 2016, Reuters reported on Thursday.
Lyft has hired JPMorgan Chase, Credit Suisse and Jefferies as underwriters. The race between it and Uber is one of the most closely watched in Silicon Valley.
A provision included in an investment by SoftBank in Uber requires the company to file for an IPO by Sept 30, or the company risks allowing restrictions on shareholder stock transfers to expire.
Uber investor Mitchell Green, a partner at Lead Edge Capital, said Lyft going public first bodes well for Uber, because if Lyft trades at a high multiple, the much-larger Uber will command even more money.
"Lyft has built a very US-based ride-share business that has done well," Mr Green said. "If public market investors get excited about that, they are really going to get excited about a business that is five times the size."