On Thursday, the first ever IPO for a ride-hailing company occurred and this led to Lyft being valued at $24.3 Billion. With this valuation, Lyft has become the largest company to go down the public sector route after Alibaba. Of course, this may change once Uber gets into the mix as it is already valued at a staggering $120 Billion.
According to experts, the ride-hailing market is one that is going to continue to grow as more and more urban youngsters choose not to buy their own cars. This is one of the reasons why Lyft has been valued so highly in spite of the fact that it has been showing consistent losses over time.
“In a good market, people look beyond things. They don’t see the problems as much,” said Brian Hamilton, who is the co-founder of Sageworks, a data firm.
image source: lyft.com
With this in mind, Lyft raised $2.34 Billion in its IPO and priced over 32.5 million shares, which is far more than what the company originally wanted to offer. Its share price range was estimated by experts to be around $70-$72 per share, and the company managed to price each share at $72. This is a better performance than what the company itself had anticipated. They had originally priced their shares around $62-$68.
Lyft is, of course, Uber’s rival and is much smaller than the global giant. With its valuation, experts are excited to see what will happen when Uber also begins its IPO roadshow. Uber recently acquired Careem, a ride-hailing company that is based in Dubai, and this raised its valuation to $120 Billion. Experts had predicted at this time that this should impact the giant’s IPO quite positively when it happens. Now, with Lyft’s performance, people are expecting the IPO for Uber to be phenomenal.
