Yesterday Lyft filed SEC paperwork to pursue an initial public offering, beating rival Uber and setting the stage for a rush of technology companies to join the stock market. Uber has also been expected to announce intentions for an IPO in 2019, along with the online lodging marketplace Airbnb. Lyft was last valued at $15 billion in June after receiving a $600 million round of funding, but the number of shares and potential selling price for the IPO have remained confidential. Sources expect the valuation for Lyft to be between $18 billion and $30 billion.
The prospect of many technology-based peer-to-peer services going public outpaces many norms in the equity market. Uber is currently valued at $76 billion and could potentially launch at $120 billion, far exceeding the previous largest IPO Alibaba (NYSE: BABA) at $25 billion in 2014.
While Uber stands as a giant among emerging tech companies, other IPO hopefuls have eclipsed previous records. Airbnb is the second most valuable startup in the United States at $31 billion. CEO Brian Chesky has stated the company plans to have on IPO by July.
Airbnb’s advantage over other tech firms is that it became profitable in 2016 while ride-sharing Uber and Lyft continue to see losses. Lyft expects to become profitable in 2018 as revenues increase and costs slow in growth. Many startups experience losses generated by research and development; Lyft alone doubled its R&D spending from $136 million in 2017 to $300 million in 2018. General Motors holds a 9% stake in the company with the interest in developing self-driving cars.
Lyft’s decision comes at a time when FAANG stocks, which account for the most popularly traded tech companies, have been suffering from a market rout. The tech focused NASDAQ exchange fell by four percent on Tuesday and saw losses across all five of its most popularly traded companies. Despite the downturn, Lyft and other peer-to-peer services are confident in their product’s viability for a profitable future.