Uber has been valued at $82bn (£63bn) for its IPO today.
Based in San Fransisco, Uber operates in 700 cities and counted 91 million users a month by the end of 2018. Uber customers travelled 26bn miles last year – the equivalent of five and a half round trips to Pluto.
The ride-hailing app is asking for $45 (£34.60) per share, at the low end of the $44 to $50 range it previously set. 180m new shares are on offer, and existing investors, including directors, co-founder Travis Kalanick and its largest shareholder, the $100bn SoftBank Vision Fund backed by Saudi Arabia, will also sell stock. Uber hopes to raise $8.6bn (£6.6bn) to fund growth and R&D.
The $82bn valuation falls short of the $100bn hoped for prior to Lyft’s disappointing flotation. Lyft, Uber’s primary competitor, beat Uber to a public offering in March, with a starting price of $72 (£55) per share. Lyft’s IPO may have spooked potential Uber investors as Lyft’s share value shortly dropped by a third.
Lyft and Uber boast similar business models, with both companies achieving fast revenue growth but struggling to reach profitability. Concerns about the sustainability of Uber’s business model were somewhat confirmed by the company’s recent admission in its investment prospectus that it had yet to turn a profit – and may never do so. The company lost $1.8bn (£1.38bn) last year despite more than a 40% increase in revenue.
Uber’s IPO may have been further hindered by Wednesday’s strike by Uber drivers around the world. Drivers across the globe – including in four UK cities – logged off the app in protest of Uber’s treatment of its drivers, and especially at the prospect of shareholders making millions from the IPO while drivers face pay cuts. Investors are set to sell 27m shares, walking away with around $1.27bn (£0.98bn).
However, despite these roadblocks, and despite a poor week for the stock market in general, Uber’s $82bn IPO is one of the biggest of all time, proving there is still some appetite for shares in the ‘pre-profit’ tech giants.