Lyft launched its initial public offering (IPO) on 28 March and you can now trade on Lyft shares via our platform. Find out more about the company, its potential valuation and trading on Lyft shares with CMC Markets.
Lyft is an on-demand ride-hailing company, where passengers use the Lyft mobile app to request rides from nearby drivers. It was launched in San Francisco in 2012 by Logan Green and John Zimmer as a service of Zimride, a ridesharing company the two founded in 2007. Zimride was sold in 2013 so attention could be focused solely on expanding Lyft. Lyft operates primarily in the US and Canada and, along with Uber, has become one of the most popular ride-hailing companies.
Lyft’s IPO filing gave a clearer picture of the company’s 2018 performance. It showed Lyft made $2.1bn in revenue last year, double the revenue recorded in 2017. However, losses were also steeper at $911m, an increase of 32% from 2017.
The company also took $8.1bn worth of bookings in 2018, up 76% compared with a year earlier, and is slowly claiming more market share from rival Uber – Lyft had reportedly claimed 39% of the US market at the end of 2018, an increase on previous years. It has seen strong growth year-on-year in both active riders and total rides per quarter.
In its last funding round (June 2018), the company had a financial valuation of $15.1bn on the private market.
Lyft became the first US ridesharing company to go public, ahead of Uber who are looking to move into the public market later this year. While there are many similarities between the two companies – they both offer an app-based ride-hailing service – Uber is the larger company, operating in over 70 countries.
Another difference between Uber and Lyft is their business models. Uber has expanded into the overseas market, as well as new areas such as delivery (Uber Eats) and shipping (Uber Freight), while Lyft is focused solely on the thriving US ridesharing market.
An IPO, or initial public offering, occurs when a company sells its stock to the public for the first time. Before an IPO, a company is classed as private and normally has a small number of shareholders and professional investors (such as venture capitalists or angel investors).
Once a company goes public, a portion of its shares are made available to the public to be traded on a stock exchange as an IPO investment. Any individual or institution that has an interest in the company then has the opportunity to invest in it. There is normally a lot of trading activity around the time the shares go up for sale, which can create volatility and potential trading opportunities. Please note, increased volatility can also increase risk for investors and traders.
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