Uber is looking to rev its engines with a potential jaw-dropping IPO valuation that could hit the market in early 2019. As the Wall Street Journal reports, if initial estimates hold true, this would value Uber at more than the market caps of GM, Ford, and Fiat-Chrysler combined.
Uber Technologies Inc. recently received proposals from Wall Street banks valuing the ride-hailing company at as much as $120 billion in an initial public offering that could take place early next year, according to people familiar with the matter.
That eye-popping figure is nearly double Uber’s valuation in a fundraising round just two months ago and more than General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV are worth combined.
Goldman Sachs Group Inc. and Morgan Stanley MS +5.65% last month delivered the valuation proposals to Uber, the people said. These documents, which typically advise on how to position shares to potential investors, are a common step before banks are formally hired to underwrite IPOs.
The bank presentations show Uber gathering momentum toward an IPO that is among the most hotly anticipated on Wall Street and Silicon Valley and could come sooner than expected as the new-issue market sizzles. Founded in 2009 and sustained by an ample supply of private capital, Uber is seen as a bellwether for a crop of highly valued startups that have delayed tapping the public markets. Its expected debut comes as rival Lyft gears up for an IPO on a similar time frame.
Not only Uber, but Lyft is also reportedly lining things up for an IPO, albeit much smaller, in 2019. This demonstrates not only the current robust state of the on-demand economy, but also expectations for future growth. Another on-demand player, in the food delivery market, Postmates, is said to be testing the pre-IPO waters as well. Payments providers will be big beneficiaries too, since the on-demand players generate high and frequent transaction volume. Hang on and enjoy the ride.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group
