Uber Is Said to Aim for I.P.O. Valuation of Up to $100 Billion

on Apr11
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Uber gave the first sign of how big its highly anticipated initial public offering might be, telling some investors that its stock sale might value it at up to $100 billion, people briefed on the matter said.

The number, which is below a $120 billion valuation that had been floated by investment bankers, highlights the size of the ride-hailing colossus as it prepares to embark on its market debut, the biggest in recent years. Its shares are expected to begin trading on the public markets next month.

The revelation follows the I.P.O. last month of Uber’s main North American competitor, Lyft, whose shares have since dropped more than 15 percent from their offering price. Another Silicon Valley darling, the digital pin board Pinterest, this week set pricing expectations for its own market debut below its last private fund-raising round.

The moves raise questions about investor appetite for prominent but unprofitable technology companies, with a slew of them — including the messaging company Slack and the home fitness company Peloton — also aiming to list their shares this year.

At $90 billion to $100 billion, Uber would be one of the largest American tech companies to go public in recent years. Its debut would be rivaled only by Facebook, which went public at $104 billion in 2012. Alibaba, the Chinese e-commerce giant, was the largest initial offering, at $168 billion in 2014. Lyft, by contrast, has a market capitalization of about $17 billion.

In recent weeks, brokers who sell shares on behalf of employees and early investors have offered Uber stock to buyers at the $80 billion to $100 billion valuation range, according to two people familiar with them. These sales, on what is known as the secondary market, mean sellers can lock in their returns without waiting for the I.P.O. lockup period to end, while avoiding uncertainty about how the stock will trade. In 2017, some of Uber’s early investors and employees sold portions of their stock to SoftBank as part of the Japanese conglomerate’s $7 billion investment in the company.

Although Uber’s debut is hotly anticipated, the company remains unprofitable. The ride-hailing service has released some of its quarterly earnings figures publicly, even though it was not obligated to do so as a private company. In February, Uber said it lost $842 million in the fourth quarter of 2018 on revenue of $3 billion.

How the company will get to a point where it makes more money than it loses is likely to be a key question when Dara Khosrowshahi, Uber’s chief executive, meets with investors to sell shares in the coming weeks. Mr. Khosrowshahi has pulled back from some markets where Uber was losing money, such as Southeast Asia. But he is also continuing to spend as the company expands into businesses such as food delivery and long-haul trucking.

Mr. Khosrowshahi has previously emphasized the importance of Uber’s business being able to generate cash. He has also said that the company does not need to be making money before going public, but that it must be able to show a path to profits.

“You need to demonstrate a very clear road to profitability,” Mr. Khosrowshahi said at the Fortune Brainstorm conference in July.

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