Uber puts brake on investor hopes with $91bn valuation

Ellie Zolfagaharifard and

James Titcomb in San Francisco UBER is hoping to achieve a valuation of $91bn (£70.3bn) by raising as much as $9bn in what is expected to be the biggest initial public offering in the US this year.

The taxi app plans to offer 180 million shares at $44 to $50 each on the New York Stock Exchange in May. Its valuation is lower than investors had hoped, with the firm likely taking a cautious approach due to the disappointing recent listing by US rival Lyft. Reports had estimated around $120bn.

“Lyft’s belly flop may well have concentrated some minds in Uber management being more realistic about getting the IPO out of the gate,” said Michael Hewson, market analyst at CMC Markets UK. At $91bn, San Francisco-based Uber would still be among the 10 largest American IPOS and the biggest on an exchange there since Alibaba was valued at $25bn in 2014.

It will also be one of the largest in tech history behind Facebook, valued at $104bn when it went public in 2012. The listing will create a further set of Silicon Valley millionaires and billionaires: co-founder Travis Kalanick could pick up close to $8bn.

Uber revealed it is selling $500m of stock to Paypal, which processes payments for the firm, at the listing price. “We and Paypal intend to explore future commercial payment collaborations, including the development of our digital wallet,” the filing reads.

In the filing with the Securities and Exchange Commission, Uber said it expects to make a net loss of $1.07bn on $3.07bn of revenue in the quarter despite completing 1.5bn passenger journeys during that time. Revenue growth slowed to 19pc, from 22pc growth in the same period last year.

“This makes it even more crucial that the business is able to diversify in other areas with Uber Eats also showing good growth potential.

“However, both delivery and ride sharing apps are becoming an incredibly crowded and competitive market place,” said Mr Hewson. Uber management will spend the next 10 days pitching to public markets investors.