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Lyft begins its IPO roadshow:
The disruption of the ride-hailing and ride-sharing apps continues, with more contenders entering the market and growing in their influence. Lyft, one of the main rivals to Uber, plans to launch its IPO before Uber does the same in April. Lyft is currently launching its IPO roadshow and aiming to offer over 30 million shares at an average price of $64 per share.
Both companies have valuations above US$1 billion, and Uber has recently turned a profit. The move to tap into public funding is a turning point for the two companies. The recent long-term bullish market may have motivated them to make this move, although it is not guaranteed that this bullish market will continue.
Different valuation targets
For Lyft, the target is a valuation of $23 which can be achieved if it manages to raise $2 billion from the IPO. The target for Uber, on the other hand, is a valuation of $120 billion . Uber offers services of greater breadth and they include both transportation and logistical services, and hence the difference in sought-after valuations.
Both companies are attempting to showcase their strong competitive advantage. Lyft is trying to show it is more specialized with its single ride-hailing service. Uber is trying to show that its line of services is diverse and enables it to play in different markets.
While Uber has turned a profit, Lyft has not yet. Lyft remains at a loss although it has acquired 40 percent of the US market thus far. Those losses may affect the eventual share price after the IPO. J.P. Morgan, Credit Suisse, and Jefferies will be among the banks handling the process.