Lyft has so far played second fiddle to its rival Uber, but the 2019 Lyft IPO gives the ride-share unicorn a chance to come out on top.
According to a press release from Dec. 6, Lyft confidentially submitted a draft statement to the U.S. Securities and Exchange Commission announcing plans to list its common stock publicly. That filing beat Uber's IPO filing by a day.
Plus, Lyft plans to go public before Uber, eyeing an early 2019 IPO date.
And these blockbuster IPOs are just two of at least ten companies with a valuations above $1 billion going public in 2019.
But the Uber and Lyft IPOs are going take center stage.
Today, we want to talk to you about what makes the Lyft IPO so enticing for investors - and how it can use a public offering to springboard past Uber...
Lyft Is Smaller but More Nimble
Although both companies operate in the ride-sharing space, they both have very different business models and offer different streams of services to grow their revenue and profits.
Lyft will have a significantly smaller market capitalization than its rival Uber after both go public. Following a private fundraising event in 2018, Lyft's valuation was set around $15 billion. That figure represents about a quarter of its rival's valuation.
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When Lyft does go public, it could see a market capitalization of about $20 billion, while Uber is reportedly looking at a possible valuation of $120 billion.
But size doesn't tell the full story here.
Uber has been plagued by scandals, while Lyft powers on.
Uber was mired in a battle with Alphabet Inc. (NASDAQ: GOOGL) over self-driving car technology Uber is accused of stealing. Uber agreed to settle the case for $245 million and $72 billion worth of equity.
That came after founder and former CEO Travis Kalanick was ousted from the company amid accusations of poor management and a culture that allowed sexual harassment.
Now Uber is still fighting accusations from city and state governments that the company tried to subvert law enforcement using deceptive software.
Lyft has so far avoided similar scandals.
That gives a big leg up to Lyft, since the Lyft IPO date will hit before Uber's...
Why Lyft's IPO Date Will Give It a Big Advantage
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It's no secret Lyft is the smaller company, but by avoiding scandals and going public first, it may be the more attractive investment for Wall Street. That will give it the funds it needs to expand and conquer Uber.
While neither Uber nor Lyft is currently profitable, Lyft boasts stronger driver satisfaction and is growing its market share. Within two years, the company would go from 15% of the ride-sharing market in 2016 to 29% of the market in 2018.
That sort of growth could make it a more attractive investment when it goes public.
Lyft already received a $100 million investment in 2015 from hedge fund manager Carl Icahn, a move that legitimized its operations and could be a preview of what's ahead once it goes public.
Today, Lyft operates in just two countries: the United States and Canada. That is well short of the 70 markets in which Uber operates. However, the firm is set to expand internationally in the year ahead, and an IPO could add the extra funding the firm needs to expand.
Like Uber, the company has expanded its operations beyond traditional car-sharing services. The company owns Motivate, the nation's largest bike-sharing firm, and plans to expand its operations into dockless scooters and bicycles. It also announced a $100 million investment into New York City's massive City Bike network, which is operated by Motivate.
Should Lyft proceed with its IPO in the first quarter, it will gain another advantage over Uber, as investors eager to jump into the potentially lucrative ride-share industry won't wait for scandal-plagued Uber.
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