The biggest IPO of the year is on its way.
Uber’s initial public offering, expected to value the company at about $100 billion, could be among the largest in history, and will likely compete with Alibaba for the biggest tech IPO ever. Uber’s debut also would dwarf Facebook’s as the No. 1 IPO by an American tech company. The social networking company raised $16 billion at an $81 billion valuation in 2012.
Uber reported net income of $997 million but an adjusted EBITDA loss of $1.85 billion last year on revenue of $11.3 billion, according to its S-1 filing with the Securities and Exchange Commission that was made public Thursday. It will become the third of the high-profile, Bay Area-based, money-losing unicorns — startups worth $1 billion or more — to go public this year. A couple of other local, less well-known tech companies have also filed (Zoom) to go public, or have gone public (PagerDuty) in recent days.
Uber’s main rival and fellow San Francisco ride-hailing company, Lyft, made its debut on the Nasdaq Stock Market at the end of March and has had a bumpy ride since. Thursday, Lyft shares closed at $61.01, down 15 percent from their IPO price of $72. Meanwhile, digital-scrapbook startup Pinterest filed for its IPO Monday, seeking to raise as much as $1.28 billion in a public offering that could value it at about $9 billion, which is below its previous valuation.
Uber’s last known valuation was $76 billion, and some reports had said it was aiming for a valuation of $120 billion when it goes public. But Lyft’s stock market performance so far, amid questions about whether it can become profitable, appears to have tempered Uber’s hopes for its IPO.
And some experts think Uber, which operates in more than 70 countries, may face more challenges. Lyft’s operations are mostly in the United States, although the company has recently expanded to a few cities in Canada.
“The impact of international markets and regulation of the ride-share industry could be significant for Uber going forward,” said Richard Clayton, research director for union pension-fund adviser CtW Investment Group.
In addition, Uber has issues that are unique to the company. A few years ago, Uber was embroiled in controversy that included accusations of a toxic workplace culture that included sexual harassment, plus negative reports about the company’s business practices. Those troubles eventually led to the departure of its co-founder and CEO, Travis Kalanick, and the company brought in a new chief executive, Dara Khosrowshahi, in 2017.
Khosrowshahi will be responsible for convincing potential investors during the company’s roadshow — which will reportedly get underway at the end of April ahead of a May IPO — that he has changed Uber for the better.
In its prospectus, the company says it has improved its governance, declaring “It’s a new day at Uber.” Its CEO’s letter says, in part, that “we have … made the changes necessary to ensure our company culture rewards teamwork and encourages employees to commit for the long term.”
Uber also emphasized its many bets: its Uber Eats food-delivery business, Uber Freight, its investment in e-scooters and autonomous vehicles.
As a private company, Uber has raised billions of dollars in multiple rounds of funding. According to its filing, among its biggest investors are SoftBank, Benchmark Capital, Alphabet and Kalanick.
Shares of the ride-hailing pioneer will list on the New York Stock Exchange under the ticker “UBER.”