Venture backers reap multibillion-dollar payday in Lyft IPO

Lyft will IPO on Friday with an insane $24.3 billion valuation

Earlier in the week, it had revised its deal price range to $70 to $72 a share, up from an initial targeted range of $62 to $68 a share, as investor demand surged.

Although it is common among highly valued tech companies, public market investors still balk at this structure, which gives founders more votes per share and outsized control of the company, long after it is startup-sized.

Later today, Lyft will be first out the gates with its IPO, just weeks ahead of Uber which has plans to list in April.

The overwhelming response to Lyft's IPO could be the result of investors' high future growth expectations from the ride-hailing industry and their trust in Lyft.

The company has for years been an underdog in the fast-growing ride-hailing business and has been famous for the hot pink fuzzy mustaches drivers have been attaching on their cars' bumpers besides the friendly fist-bumps drivers were asked to greet riders.

Lyft priced its IPO at $72 per share on Thursday, which valued the ride-hailing company at about $24 billion. "So I look at what I'm getting as a part owner of a business, and I don't know why, with all the things you can buy for $25 billion in this world, that you would pick a business that really has to be earning $2.5 or $3 billion pre-tax in five years to even be on the same radar screen as things you can buy right now".

Lyft raised $2.34 billion its IPO. Lyft's net loss climbed to $911 million in 2018, which is more than any other U.S. startup has lost in the year prior to its IPO.

Lyft and Uber drivers have tried - and failed - on multiple occasions to be reclassified as full-time employees instead of freelance workers. "Lyft launched in 2012, and has embarked on a mission to improve lives with the best transportation, and ride-by-ride, you are helping to reimagine how our cities can be built around people, not cars". They include Uber, Postmates, Slack, Pinterest, etc.

Analyst Richard Windsor, who writes the tech blog Radio Free Mobile, argues that Lyft may not be ready for the scrutiny it will face as a publicly-traded firm.

Lyft posted a loss of $911 million in 2018 versus $688 million in 2017, despite revenue doubling in 2018 to $2.16 billion.

Despite Lyft's recent inroads, there is still no guarantee the company will become profitable - a risk flagged in its own regulatory filings leading up to the IPO.

Experts say it could be many years before autonomous vehicles are deployed on a large scale.

And Lyft's executives, for their part, don't seem very anxious about the negative cash flow either.

Green and Zimmer have structured the shares so that together they will hold 49 per cent of the voting power, enough to substantially influence major decisions.

Lyft said Friday it will invest $50 million annually, or 1 percent of profits - whichever is greater - in transportation initiatives in cities.

Bussewitz reported from NY.

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