Uber Technologies Inc on Thursday filed documents for its much-anticipated public share offering expected to be the largest in the tech sector in years, and a bellwether for other venture-backed start-ups eyeing a US listing.
The filing with the US Securities and Exchange Commission (SEC) contained no specific pricing or timing for the market debut for Uber, which media reports said was expected to raise about US$10 billion.
Uber’s valuation in its latest private investment round was more than US$70 billion, but reports said the ride-hailing giant was likely to seek a market value of close to US$100 billion.
Photo: Reuters
The filing said that Uber offers ride-sharing in about 700 cities, but has bolder ambitions to reshape how people and goods are transported with operations such as meal deliveries, freight, and electric bikes and scooters.
“Our mission is to ignite opportunity by setting the world in motion,” the document filed with the SEC said.
“We revolutionized personal mobility with ridesharing, and we are leveraging our platform to redefine the massive meal delivery and logistics industries. While we have had unparalleled growth at scale, we are just getting started,” it said.
Uber said it operates on six continents with about 14 million trips per day and has totaled more than 10 billion rides since it was founded in 2010.
The filing contained a “placeholder” amount of US$1 billion to be raised, but that figure is expected to increase ahead of the initial public offering (IPO) expected for next month.
The move comes after a lackluster market debut for Uber’s US rival Lyft Inc, which has lost more than 10 percent of its value since its IPO last month.
Chief executive Dara Khosrowshahi, who took over in 2017 as part of an effort to reform a corporate culture marred by misconduct and other scandals, said that Uber has taken steps to restore its brand and credibility.
“Taking this step means that we have even greater responsibilities — to our shareholders, our customers and our colleagues,” Khosrowshahi said in a letter announcing the IPO.
Both Uber and Lyft are predicting that ride-hailing would gain even more traction with autonomous vehicles, allowing more people to give up private vehicles and freeing up more urban space.
“We believe that autonomous vehicle technologies will enable a product that competes with the cost of personal vehicle ownership and usage, and represents the future of transportation,” Uber’s filing said.
However, analysts have warned that Uber and Lyft face a difficult road to profitability amid challenges from regulators and established taxi operators around the world.
Some question the business model of using independent contractors as drivers — a system which the companies say is more flexible and leads to entrepreneurial spirit.
Uber’s revenue grew 42 percent last year to US$11.2 billion, but it continued to lose money from its operations. A net profit was reported for the year from a large asset sale, but operational losses were more than US$3 billion.
“Investors should be ready for a lot of volatility” in Uber, said Scott Rostan, a former investment banker who is currently an adjunct professor at the University of North Carolina.
“In my opinion if you are buying into Uber or Lyft you’re buying into a belief this is going to revolutionize transportation in the future, but a good business doesn’t necessarily mean a good investment,” he said.
Rostan added that both firms would be seeking to step up growth and that “if it turns into a market share fight between Uber and Lyft, profitability is going to be tough.”
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