Ride-hailing start-up Lyft is now in the final stretch of its initial public offering (IPO). The company announced on March 18 that it has launched its roadshow in preparation for its public debut. In an updated S-1 registration statement filed with the Securities and Exchange Commission (SEC), Lyft said it will offer 30.77 million Class A shares that will be priced in a range of $62 to $68 per share, which would raise about $2 billion for the soon-to-be-public company. The underwriters also have the option to sell an additional 4.6 million shares, depending on demand, boosting the total raised to $2.4 billion if the full allotment is sold.
This would value Lyft at between $21 billion and $23 billion, much higher than the $15.1 billion valuation in its most recent funding round in June 2018.
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The roadshow
Lyft has not yet divulged the final date of its public debut, but the initiation of the roadshow starts the clock ticking, meaning the IPO should happen within about two weeks from now.
The roadshow is typically a series of presentations given to institutional investors by the senior executives of the company. This gives management the opportunity to showcase the company, its financial position, and the opportunity it's pursuing. The company can also provide a forecast for the coming months and year. The purpose of the process is to drum up demand for the stock, and an effective roadshow is often viewed as a critical step toward a successful IPO.
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Driving toward the finish line
In its initial filing, which was made public March 1, Lyft revealed that it would be traded on the NASDAQ exchange using the ticker LYFT. The company also revealed that co-founders CEO Logan Green and President John Zimmer will retain significant control of the company due to its adoption of a dual-class share structure.
Lyft's revenue has more than doubled over the past year to $2.16 billion in 2018, up from $1.06 billion in 2017 and just $343 million in 2016. The company's roster of nearly 2 million independent drivers provided trips to more than 30 million riders last year. This resulted in $8.1 billion in total bookings (the amount riders paid).
Revenue as a percentage of bookings has been on the rise, growing to 26.8% in 2018, up from 23.1% in 2017 and 18% in 2016. The more money Lyft can retain from each ride, the more likely the company will eventually achieve profitability. That day is still a long way off, as Lyft generated growing losses last year. The company lost $911 million in 2018, up from losses of $688 million and $683 million in 2017 and 2016, respectively.
Rider metrics have also been on the upswing. Active riders -- anyone that has taken at least one ride during the quarter -- increased to 18.6 million in the December quarter, up 48% year over year. Revenue per active rider -- total revenue divided by active riders -- climbed to $36.04, up 32% compared to the prior-year quarter, and has more than doubled since the March 2016 quarter. The total number of rides in the quarter grew to 178.4 million, up 53% year over year.
In the home stretch
Lyft is entering the final stages of its IPO process. Once the company has completed its roadshow, expect an announcement of the final pricing of its shares, which could still increase, depending on demand. Investors can also look forward to Lyft's IPO, which should be happening in about two weeks.
Buckle up.
