Uber on the fast track to a $182b price tag
Uber is anticipated to have a higher valuation than Nike, Volkswagen, British American Tobacco, the Royal Bank of Canada and Salesforce as it prepares to launch of the US stock market.
The ride-hailing company could receive a valuation of as high as US$120 billion ($182b) in its upcoming initial public offering, almost double the price tag the company landed in August.
The proposals from US banks suggested Uber seek a valuation much higher than the US$76b it was valued at in August during its most recent fundraising round.
They are also said to indicate that the initial public offering could take place early next year, sooner than had been expected.
Up until now, Uber boss Dara Khosrowshahi has repeatedly said the company would seek to go public in the second half of September.
The documents were reportedly delivered last month by Goldman Sachs and Morgan Stanley, the two banks which were already understood to be the chief contenders to lead the initial public offering prior to this week’s reports.
The details were first reported by the Wall Street Journal. Uber declined to comment.
The reports suggest Uber is starting to ramp up work for the IPO, having already put in place a new chief financial officer in August and last year installing Mr Khosrowshahi at the head of the company.
Uber does not have to follow through with banks’ proposals, and could choose to join the public markets at a later date.
However, an IPO in early 2019 may prove tempting if Uber wants to steal a lead on smaller rival Lyft, which is thought to be planning its own IPO for March or April.
Although Uber is not expected to be profitable when it taps the public markets, the company has claimed it does want to show investors a path to profitability.
In its most recent accounts, Uber’s net loss narrowed to US$891 million in the three months to the end of June, from US$1.1b a year earlier, although it continued to pour cash into new services, such as food delivery and autonomous car development.
Speaking to The Daily Telegraph earlier this week, Fraser Robinson, a former Uber executive who recently left to join British startup Oxbotica, said Uber should scale back its level of spend on things such as driverless cars “to focus on what Uber really does best, which is being a ridehailing platform”.
He said, from what he saw, Khosrowshahi “had realised that should happen, and I think that is starting to happen”.