Uber Technologies Inc, the world’s largest ride-hailing company, plans an initial public offering that values the company as much as one-third below what the startup’s insiders had hoped for, between $80.5 billion and $91.5 billion.
The valuation, outlined in a regulatory filing on Friday, is less than the $120 billion that investment bankers told Uber last year it could fetch, and closer to the $76 billion valuation it attained in a private fundraising round in 2018.
The lower valuation reflects the poor stock performance of smaller rival Lyft Inc following its IPO last month. Lyft shares ended trading on Friday down 20.5 percent from the IPO price, amid investor skepticism over the company’s path to profitability.
Lyft completed its IPO at a valuation of $24.3 billion, which corresponded to around 11 times its 2018 revenue. By comparison, the top end of Uber’s valuation target is around eight times revenue last year.
“We believe that recent price reductions for both Uber and Lyft may be indicative of investor hesitance to invest in highly capital-intensive, deeply unprofitable and untested business models at this late stage of the economic cycle,” PitchBook analyst Asad Hussain said.
In the filing, Uber set a target price range of $44 to $50 per share for its IPO. The company will sell 180 million shares in the offering to raise up to $9 billion, with a further 27 million sold by existing investors for as much as $1.35 billion.
Reuters reported this month that the combined value of Uber shares sold in the IPO would be around $10 billion.
The Uber IPO would rank as the largest in the United States since that of Chinese e-commerce giant Alibaba Group Holding Ltd in 2014.
The updated public filing comes as Uber begins its 10-day investor road show, in which management will pitch the company to public markets investors.
Uber executives kicked off the road show in New York on Friday. They will host an investor presentation in London on Monday, before returning to the United States for visits to New York a second time, and to Boston, San Francisco and the Midwest.