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EquityZen Management Discusses Uber's IPO

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Risun Udawatta   May 09, 2019

On Friday, May 10, Uber will go public on the NYSE. The company's IPO is expected to be the largest IPO since Alibaba hit the public markets in 2014. On the eve of Uber's IPO, EquityZen's founders appeared on Cheddar, Bloomberg Asia, and CNBC to discuss their thoughts on Uber's IPO.

Below, we have compiled recent media appearances and relevant readings to help you stay up-to-date with the information you need to know about Uber as they ring the bell and go public.

Check out our Uber IPO Center to learn more!

Will Market Uncertainty Impact Uber IPO?

Phil Haslett, Co-Founder and Chief Revenue Officer of EquityZen, joined Cheddar to discuss Uber's IPO and how Friday may not be the best day for Uber given the recent market volatility.

"When you tack on this tariff disagreement that might come down tomorrow, it's kind of like having your wedding tomorrow and the hotel saying, 'Hey, by the way, we might have a Smashing Pumpkins concert happening right next to you.'" - Phil Haslett

EquityZen's Haslett on Uber IPO, Driver strike, Business Model

Phil Haslett, Co-Founder and Chief Revenue Officer at EquityZen, discusses the strike by Uber drivers around the world, the business model of the gig economy, how Uber can differentiate itself from Lyft, and Uber’s Asian competitors.

"At some point the rubber is going to meet the road with the gig economy, where Uber will need to convert the folks on 1099 contracts to full-time [employees], which is going to have a big impact on the business." - Phil Haslett

How Uber loses money

CNBC's Dierdre Bosa and EquityZen CEO Atish Davda join "The Exchange" to discuss Uber's plan to go public on Friday, May 10.

"Uber is pricing itself to be very distinct from Lyft, and hopefully for the final time say, 'We're not the same company. We're five times larger and we're in 56 more countries than Lyft is in.'" - Atish Davda

EquityZen In The News


Spotify Direct Listing: 1-Year Anniversary

NYSEspotifydirect listingipoinitial public offeringanniversary
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Michael Wenner   April 04, 2019

A successful startup lifecycle runs through the humble inceptions from a determined founder and a single laptop to a multimillion-dollar exit. Out of the many ways a startup may exit, the one that every founder dreams of is seeing their company come across the ticker tape at a national stock exchange, marking their public debut. Traditionally, companies go public through an IPO (initial public offering) where they issue new shares to raise massive amounts of capital that will fill the company’s coffers. On the downside, an IPO also means that the private shareholders, consisting of founders and early stage investors such as VCs, are diluted and must wait for the lockup period to expire to exit.

This presents a conundrum to companies that don’t necessarily need to raise new capital or want to dilute ownership but still want to provide shareholders with the ability to exit their investments through the public stock market. On April 3, 2018, it appears these companies got their answer: they can mimic Spotify by pursuing a direct listing.

Why did Spotify go the direct listing route?

There are likely a couple key reasons. For one, they were already generating positive free cash flows before the listing, and thus did not need to raise capital. Moreover, by listing directly, they were also able to save the large fees usually charged by investment banks as well as enable their early stage investors to cash out without enduring the lockup period before selling their shares.
Source: YCharts; Market Data as of 4/3/2019

On the first day of the listing, Spotify closed just over $149 per share, beating the reference price of $132 set by NYSE. This allowed their private investors to realize a sizable return on investment as private trading reportedly ranged between $37.50 and $125 per share during 2017. We wrote a bit about our investors’ returns at that time here. With favorable Wall Street forecasts and a partnership with Samsung, Spotify was able to climb to an all time high of $198.99 in August 2018. Since then, several lower than expected quarterly results have brought the share price back down to the current $140-145 range.

What is the legacy of the direct listing?

With so much dry powder ready to be deployed in the private markets, startups are able to stay private for many years before they have to tap the public markets for additional capital. In fact, startups have raised so much private capital that now direct listings are a possibility for an ever-growing number of companies that don’t need additional cash. In just a year since Spotify’s IPO, two of Silicon Valley’s most revered unicorns, Slack and Airbnb, are reportedly exploring direct listings (although neither has confirmed nor denied the rumors). Until another major unicorn successfully executes on a direct listing, it is unknown whether Spotify has begun a trend that will allow startups to cut out expensive investment banking fees and offer immediate liquidity to their private market shareholders. Nevertheless, Wall Street firms will be watching Slack and Airbnb closely with disappearing profits on their mind.

Lyft Beats Uber to First Ride-Hail IPO

NYSELyftUberRide HailRide SharingIPO
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Adam Augusiak-Boro   March 28, 2019

Lyft, Inc.’s public debut will kick off one of the most highly-anticipated IPO seasons in recent memory. As companies stay private longer and the number of public companies in the U.S. remains at an all-time low, blockbuster IPOs like Lyft are an increasingly rare occurrence. We cover some of the reasons behind the fall in IPO activity in EquityZen’s 2019 IPO Outlook, which predicts that Lyft and 15 other companies, including its larger, global competitor Uber, will finally go public in 2019 and reignite what has been a largely muted IPO calendar over the last several years compared to previous bull markets. With Uber on its heels, Lyft is set to begin trading on March 29 at a fully-diluted valuation of around $25 billion (Lyft’s latest S-1 filing indicates a price range of $70 to $72 per share), allowing public investors access to Lyft’s stock for the first time in its history. Previously, investors looking to purchase Lyft shares had to participate in private financing rounds with high minimum investment thresholds or seek secondary offerings on pre-IPO trading platforms like EquityZen.

Now that we finally have access to Lyft’s full financial statements and management commentary within Lyft’s Form S-1, we have prepared the below mentioned report with our thoughts on the company’s total addressable market (TAM), path to profitability, comparable companies, and a number of growth levers and downside risks. As Lyft cements its IPO pricing post-roadshow, we expect that institutional investors have asked Lyft’s management many of the same questions that we cover below.

Sector Overview: Transportation-as-a-Service

Ride-hail companies like Lyft identify as multimodal transportation networks operating within the burgeoning Transportation-as-a-Service (TaaS) industry—also referred to as Mobility-as-a-Service (MaaS). TaaS describes a shift away from personally-owned modes of transportation and towards mobility solutions that are consumed as a service, often on-demand, and tailored to the individual needs of a traveler through a variety of transportation options, like ride-hailing and carpooling.

This industry, born in the wake of the Great Recession, was made possible by the mass adoption of smartphones, which for the first time allowed millions of drivers and riders to connect via ride-hailing apps. As the industry developed, several modes of transportation have been incorporated into TaaS networks, including:
  • Ride-hail: Ride-hailing is a service that connects riders with local drivers, giving riders a door-to-door transportation option. Example: Lyft’s core, on-demand ride-hail offering.
  • Carpool: Carpooling connects drivers with other passengers looking to travel to the same long-distance destination, sharing the cost of the journey between the driver and passengers. Example: Paris-based BlaBlaCar’s long-distance service.
  • Shared rides: Shared rides are the intersection of ride-hailing and carpooling, where riders traveling similar routes share a trip, often for short distances. Examples: Via, UberPool and Lyft’s Shared rides
  • Bikes and Scooters: Bike and scooter rentals provide consumers with a first- and last-mile option, giving riders the option to pick up and drop off these rentals anywhere they are available. Examples: Bike and/or scooter rentals are now offered by a number of companies, including Uber, Lyft, Lime and Bird.
  • Autonomous Vehicles: Autonomous vehicle (AV) rides are still in their infancy, but ride-hail companies like Lyft and Uber hope AVs will eventually provide all of the rides on their respective networks. Examples: In addition to Uber and Lyft, a number of diverse companies are chasing AV ambitions, including General Motors, BMW, Tesla, Apple and Waymo.
So how large is this TaaS market? And where does Lyft fit in? Download our report to dive in.