Uber makes con­fi­den­tial fil­ing for long-awaited IPO

Iran Daily - - Science & Technology -

Uber Tech­nolo­gies Inc. has filed pa­per­work for an ini­tial pub­lic of­fer­ing, ac­cord­ing to three peo­ple with knowl­edge of the mat­ter, tak­ing a step closer to a key mile­stone for one of the most closely watched and con­tro­ver­sial com­pa­nies in Sil­i­con Val­ley.

The ride-hail­ing com­pany filed the con­fi­den­tial pa­per­work on Thurs­day, one of the sources said, in lock­step with its smaller US ri­val, Lyft Inc., which also an­nounced on Thurs­day it had filed for an IPO, Reuters re­ported.

The si­mul­ta­ne­ous fil­ings ex­tend the pro­tracted bat­tle be­tween Uber and Lyft, which as fierce ri­vals have of­ten rolled out iden­ti­cal ser­vices and matched each other’s prices. Uber is ea­ger to beat Lyft to Wall Street, ac­cord­ing to sources fa­mil­iar with the mat­ter, a sign of the com­pany’s en­trenched com­pet­i­tive­ness.

Its fil­ing sets the stage for one of the big­gest tech­nol­ogy list­ings ever. Uber’s val­u­a­tion in its most re­cent pri­vate fi­nanc­ing was $76 bil­lion, and it could be worth $120 bil­lion in an IPO. Its list­ing next year would be the largest in what is ex­pected to be a string of pub­lic de­buts by highly val­ued Sil­i­con Val­ley com­pa­nies, in­clud­ing apart­ment-rent­ing com­pany Airbnb Inc. and work­place mes­sag­ing firm Slack. On­go­ing mar­ket volatil­ity, how­ever, could al­ter com­pa­nies’ plans.

The IPO will be a test of pub­lic mar­ket in­vestor tol­er­ance for Uber’s le­gal and work­place con­tro­ver­sies, which em­broiled the com­pany for most of last year, and on Chief Ex­ec­u­tive Dara Khos­row­shahi’s progress in turn­ing around the com­pany.

Khos­row­shahi took over just over than a year ago, and has re­peat­edly stated pub­licly he would take Uber pub­lic in 2019. In Au­gust, he hired the com­pany’s first chief fi­nan­cial of­fi­cer in more than three years.

To­gether, Uber and Lyft will test pub­lic mar­ket in­vestor ap­pet­i­tive for the ride-hail­ing busi­ness, which emerged less than a decade ago and has proven wildly pop­u­lar, but also un­prof­itable.

Uber in the third quar­ter lost $1.07 bil­lion and is strug­gling with slow­ing growth, although its gross book­ings, at $12.7 bil­lion, re­flect the com­pany’s enor­mous scale. Its rev­enue for the quar­ter was $2.95 bil­lion, a five-per­cent boost from the pre­vi­ous quar­ter. Its book­ings grew just six per­cent for the quar­ter.

Uber has raised about $18 bil­lion from an ar­ray of in­vestors since 2010, and it now faces a dead­line to go pub­lic.

An in­vest­ment by Soft­bank that closed in Jan­uary, which gave the Ja­panese in­vestor a 15-per­cent stake in Uber, in­cluded a pro­vi­sion that re­quires Uber to file for an IPO by Septem­ber 30 of next year or the com­pany risks al­low­ing re­stric­tions on share­holder stock trans­fers to ex­pire.

Uber has not for­mally cho­sen un­der­writ­ing banks, although Mor­gan Stan­ley and Gold­man Sachs are likely to get the lead roles, sources told Reuters. Lyft hired Jp­mor­gan Chase & Co., Credit Suisse and Jef­feries as un­der­writ­ers.

The Wall Street Jour­nal re­ported Uber’s fil­ing ear­lier on Fri­day.

His­tory of scan­dal

Be­com­ing a pub­lic com­pany will bring a height­ened level of in­vestor scru­tiny and ex­po­sure to Uber, which suf­fered a string of scan­dals when the com­pany was led by co­founder and for­mer CEO, Travis Kalan­ick, who re­signed last year.

The con­tro­ver­sies in­cluded al­le­ga­tions of sex­ual ha­rass­ment, ob­tain­ing the med­i­cal records of a woman sex­u­ally ha­rassed by an Uber driver in In­dia, a mas­sive data breach, and fed­eral in­ves­ti­ga­tions into is­sues in­clud­ing pos­si­bly pay­ing bribes to of­fi­cials and il­licit soft­ware to evade reg­u­la­tors.

Khos­row­shahi and his lead­er­ship team have worked to re­set the work­place cul­ture and clean up the messes, in­clud­ing set­tle­ments with US states over the data breach and with Al­pha­bet’s self-driv­ing car unit, Waymo, which had sued Uber for trade-se­crets theft.

Uber to­day is a dif­fer­ent com­pany than the vi­sion its founders pitched to early in­vestors, which helped it be­come the most highly val­ued ven­ture-backed com­pany in the US.

After con­ces­sions in China, Rus­sia and South­east Asia, where Uber sold its busi­ness to a lo­cal com­peti­tor, and the prospect of an­other merger in the Mid­dle East, Uber is far from be­ing the dom­i­nant global ride­hail­ing ser­vice it set out to be.

Still, Uber op­er­ates in more than 70 coun­tries, while Lyft is in the US and Canada, although the smaller com­pany is plot­ting a global ex­pan­sion.

Uber has also added a num­ber of other busi­nesses, which are grow­ing but have yet to show sus­tain­able prof­its, in a bid to be­come a one-stop mo­bil­ity app. Those in­clude freight haul­ing, food de­liv­ery and elec­tric bike and scooter rentals. Mean­while, its self-driv­ing car unit is cost­ing the com­pany about $200 mil­lion a quar­ter, ac­cord­ing to in­vestors, but Uber’s pro­gram has re­trenched since one of its au­ton­o­mous cars killed a pedes­trian in March.

HAN­NAH MCKAY/REUTERS The Uber ap­pli­ca­tion is seen on a mo­bile phone in Lon­don, Bri­tain, on Septem­ber 14, 2018.

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