Lyft’s debut hails start of Wall Street tech bonanza

THE taxi app Lyft soared on its Wall Street debut last night as Silicon Valley’s first major float of 2019 signalled strong demand for a queue of technology listings.

Lyft, the biggest rival to Uber, which is gearing up for a blockbuster listing of its own this year, was valued at as much as $30bn (£23bn) as shares rose more than a fifth after making its debut in New York.

The success is a boost to companies including Pinterest, Airbnb and Slack, which are also preparing to test investor appetite for more big tech stocks in the coming months.

The group of so-called “unicorns” have shunned the public markets for years in favour of billions of dollars in private funding, but are now racing to list while Wall Street confidence remains high.

Lyft had planned to sell shares at between $62 and $68, but strong demand led it to hike the price to $72 a share on Thursday night, raising more than $2.3bn in the largest technology listing in two years.

Shares then opened 21pc higher still, at more than $87, before closing at $79.02, or 10pc higher, as some traders banked quick profits.

The San Francisco-based company, which operates only in North America, has close to 40pc of the US ride-hailing market. Its bigger rival Uber, which also plans to go public in the coming few weeks, is watching Lyft closely and has been valued at up to $120bn by analysts.

Investor interest in Lyft and the other tech unicorns comes despite many being heavily loss making. Lyft lost $911m last year and is expected to take up to five years to reach profitability. In its IPO prospectus, the company said it may never be profitable.

Lyft’s revenue doubled to $2.2bn last year compared with 2017, while gross bookings – total value of rides before drivers’ pay is deducted – rose 76pc.

Ride-hailing apps that allow passengers to order cars with their smartphones are banking on their services becoming a realistic alternative to car ownership. Both Uber and Lyft are investing hundreds of millions of dollars in technology such as autonomous vehicles and electric scooters.

Lyft co-founder John Zimmer said: “What we’re going after is a trillion dollar market opportunity. Every year in the US, Americans spend $9,000 owning and operating their car and using it only 5pc of the time”.

Mr Zimmer, 35, and Lyft chief executive Logan Green, 34, met as graduates in 2007 and developed a carpooling network called Zimride before launching Lyft in 2012.

Demand for tech flotations comes despite recent high-profile listings performing poorly. Snap, the parent company of messaging app Snapchat, has lost more than half its value since coming to market in 2017, while Spotify and Dropbox, two of last year’s biggest listings, are also below water.