(Reuters) – Lyft Inc was valued at $24.3 billion in the first initial public offering (IPO) of a ride-hailing startup on Thursday, raising more than it had set off to do amid strong investor demand.
Lyft’s IPO sets the stage for the stock market debut of larger rival Uber Technologies Inc , which sources have said is coming in April. Uber has been told by its investment bankers that it could be valued at as much as $120 billion.
Lyft’s valuation makes it the biggest company to go public since Alibaba Group Holding Ltd in 2014. It paves the way for other Silicon Valley companies seeking to float in the stock market this year, including Pinterest Inc, Slack Technologies Inc and Postmates Inc.
Lyft raised $2.34 billion its IPO. It said it priced 32.5 million shares, slightly more that it was offering originally, at $72, the top of its already elevated $70-$72 per share target range. Lyft started its IPO investor road show earlier this month with a target range of $62-$68 per share.
The success of the IPO indicates many investors were willing to overlook uncertainty over Lyft’s path to profitability and its strategy for autonomous driving, for fear of missing out on Lyft’s strong revenue growth.
The IPO market had a slow start in 2019 due to volatile markets at the end of last year and the government shutdown in January blocking U.S. regulators from processing new IPO applicants.
With start-ups like Lyft staying private for longer, there is a backlog of demand to allocate more money to stocks which are considered high-growth in order to diversify away from Wall Street’s FAANG trade which is made up of Facebook Inc , Amazon.com Inc, Apple Inc , Netflix Inc and Google parent Alphabet Inc .
Lyft, which was valued at $15 billion in final private fundraising round in 2018, kicked off its 10-day IPO roadshow on March 18. The company’s executives made stops in cities such as New York, Baltimore, Kansas and Los Angeles. Reuters reported the IPO was oversubscribed after just two days.
Lyft’s revenue was $2.16 billion for 2018, double the previous year’s and far higher than $343 million in 2016. It posted a loss of $911 million in 2018 versus $688 million in 2017.
Reporting by Carl O’Donnell and Joshua Franklin in New York; editing by Grant McCool and Lisa Shumaker