It was reported by the Wall Street Journal on Friday that paperwork has been filed confidentially for an Uber IPO sometime in early 2019.
The Time is Ripe for an Uber IPO
In the ten years since the company founding, Uber has raised an impressive $20 billion in private funding. The latest private market valuation saw the company valued at $72 billion. While impressive, many analyst expect Wall Street’s value on the company to be over $120 billion at an Uber IPO. Uber is SoftBank’s largest investment.
An Uber IPO in Response to Competitor Lyft
The filing comes just two days after rival Lyft filed for its own IPO. The closeness in filings suggests a continued competition between the two companies as they prepare to go public. Both companies appear to be trying to be the first to the stock market. Aside from the competition, both companies are also undoubtedly being enticed by the favorable climate for tech IPO’s, as well as fears of a potential coming recession.
How an Uber IPO Fits Into the Larger Market
If an Uber IPO does fetch a Wall Street valuation of $120 billion it would be the largest IPO since Alibaba went public in 2014. Such a valuation would put Uber on par with the likes of IBM and McDonald’s. The planned IPO by both Uber and Lyft seems to signal a growing trend by large tech companies looking to go public in 2019, including housing rental giant, AirBNB.
Investors Optimistic Despite Huge Losses
Though Uber has managed to attract huge rounds of investing to date, it is also hugely unprofitable. According to the company, in the third quarter of this year Uber lost a reported $1.07 billion. Despite the enormous losses however, investors remain undeterred. According to Barret Daniels of Deloitte regarding the matter, “Revenue growth is significantly more important than worrying about the bottom line at this point.”
Whether or not an Uber investment in the public market will pay off is anyone’s guess, but with the wheels in motion for an Uber IPO, it seems there is at least a coming windfall for early private investors.