Official details of the Lyft IPO have been made official today, according to CNBC. Lyft is the second-largest ride-hailing service in the United States behind Uber, and General Motors, which invested $500 million into the company in January 2016, holds a 7.8 percent stake in the company.
The Lyft IPO prospectus, a formal legal document filed with the Securities and Exchange Commission, is a peek behind Lyft’s financial curtain. According to the filing, Lyft claims to own 39 percent of the ride-hailing market, which is an increase of 17 percent from two years ago. The company saw a net loss of $911 million in 2018 with $2.2 billion recorded in revenue last year. An earlier report cited by CNBC said Lyft expects a valuation of $20-$25 billion. That puts GM’s equity in Lyft to be worth at least $1.56 billion, meaning a Lyft IPO could be a strong ROI for General Motors, should it divest.
Additionally, it looks like Lyft will beat Uber to offering an IPO, which could draw the attention of investors away from Uber. However, the Lyft IPO could have investors waiting on Uber’s IPO, complicating future investments.
While General Motors owns a 7.8 percent stake in Lyft, the relationship between the two has been complicated. After the automaker’s initial investment, former GM President Dan Ammann got a seat on Lyft’s board of directors. However, the honeymoon period quickly came to an end. In 2017, Lyft partnered with Ford to develop self-driving technology. Subsequent Lyft partnerships with Google’s Waymo and Magna further muddled its relationship with GM. In June 2018, Ammann left Lyft’s board, moving GM to the role of a silent partner.
Another point of contention between the two companies came when GM invested in Cruise Automation just months after investing in Lyft. At the time, Cruise Automation was a two-year-old autonomous vehicle startup company. Now, the subsidiary is looking to launch a ride-sharing service sometime this year—possibly in San Francisco—as General Motors allocates $1 billion for Cruise in 2019. Late last year, GM announced Ammann would replace Kyle Vogt as CEO.
Stay tuned to GM Authority as we follow news on the Lyft IPO closely.