Let’s get right to the newsletter today:
Topic of the Week: Just Another Boring IPO
Lyft filed an S1 last week with plans to go public in April at an estimated $20-$25B valuation.
As one of Lyfts most valuable customers, I was disappointed that the potential loss of my business didn’t make the S1 as a key business risk. Other than that, this is probably the most boring unicorn S1 we will ever see.
The company is growing over 100% per year with $2.1B in 2018 revenue.
Lyft served 18.6M active riders in Q4 2018, up almost 50% YoY, with revenue per rider increasing 30%.
Their cohort chart indicates favorable retention as riders stay on and spend more over time.
They have 1.9M drivers and Lyft is offering a bonus program to allow drivers to purchase shares in the IPO.
All favorable data points for Lyft, but it makes for poor Candid content.
Where is the contentious accounting?
Where are the creative add-backs and metrics like “energy and spirituality” or EBITDA before marketing?
They didn’t even try to position the Company into a far fetched aspirational version of itself.
Sure, they lost $1B in 2018, but it would be impossible to sustain the kind of growth they’ve seen without investing in corporate overhead.
The only thing hanging over Lyft is whether or not future administrations and courts will make the company classify drivers as employees vs. contractors, but it’s too hard to predict what the real impact of this would be on the business.
Am I going soft? Did I lose my edge?
I tried to dig in and find the fundamental business risks, but I just couldn’t.
In fact, I’m left with no choice but to admit that I have a ton of respect for Lyft, what they’ve built, and believe it will be a long-term, major competitor in the transportation space.
That’s all for today. Have a great weekend everyone!