Uber Aims for $84 Billion Valuation in Year’s Largest IPO
Uber Technologies Inc. is seeking to raise as much as $9 billion in an initial public offering that could give the No. 1 ride-hailing company a market valuation of as much as $84 billion.
Plans are to offer 180 million shares at $44 to $50 each, according to a regulatory filing April 26. The filing puts Uber on track to make its trading debut in May on the New York Stock Exchange in what is expected to be the biggest IPO of the year in the United States.
At the top of the range, the listing would value Uber at almost $84 billion based on the number of shares outstanding after the offering, as detailed in the filing. On a fully diluted basis, including the addition of stock options, restricted shares or other stakes not included in the outstanding total, the valuation could top $91.5 billion.
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PayPal Holdings Inc. has agreed to buy $500 million of Uber’s stock at the IPO price in a private placement. The investment is part of a deal to extend the payment company’s partnership with Uber. The two companies plan to work together to develop a digital wallet for Uber, a PayPal spokesman said.
Uber also provided a range for its first-quarter performance in the updated filing. Based on the midpoint of Uber’s projections, the company expects to have a net loss of $1.07 billion on $3.07 billion in revenue in the quarter. Revenue growth slowed to 19% compared with the same quarter last year, down from 22% growth in the comparable fourth quarter.
At the low end of the range, Uber’s market valuation would be $74 billion — below its last private funding round, in which Toyota Motor Corp. invested at a valuation of about $76 billion. Uber is taking a conservative approach to its valuation and later could raise the price depending on investor demand, people familiar with the matter have said. Last year, bankers jockeying to lead the offering told Uber it could be valued at as much as $120 billion in an IPO.
Some recent big listings by technology unicorns have seen valuations come back down to earth after years of access to huge pools of private capital. Shares of Lyft Inc., which made its market debut in March at a $20.5 billion valuation, have since dropped 22% to well below their IPO price. Uber’s ride-hailing rival has a market value of $16.1 billion as of April 25, much closer to its last private funding round at $15.1 billion.
Venture capital firm Benchmark, Uber’s second-biggest shareholder, plans to sell the most shares into the public offering, April 26’s filing shows. At the high end of Uber’s range the sale could net the firm $287 million. It would still hold onto 8.5% of Uber’s shares after the transaction.
