Uber value soars $120 billion on IPO news

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Uber’s logo is displayed on a mobile phone in London, Britain. Reuters

BENGALURU (Reuters) – Ride-hailing company Uber Technologies Inc could be valued at $120 billion, when it finally goes public next year according to proposals made by US banks bidding to run the offering, the Wall Street Journal reported on Tuesday.

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The proposed valuation of the company is about $50 billion more than the company’s most recent valuation, setting the stage for what would be one of the biggest listings ever.

Reuters reported in late September that Goldman Sachs and Morgan Stanley were in pole position to secure top roles in Uber IPO.

Uber and smaller rival Lyft’s initial public offerings, both expected in 2019, will test investor tolerance for money losing technology unicorns.

Dara Khosrowshahi, who took over as chief executive last year, said in September that Uber was on track for a 2019 IPO, adding that he was not concerned if Lyft went public first because he expected enough demand for both companies.

Both companies have taken hits to their bottom lines in order to attract drivers and enter new markets, although they have made strides in recent years in narrowing their losses.

Uber has been seeking new avenues of growth, including food delivery services, even as it battles intense competition in its core business of ride hailing.

Goldman Sachs and Morgan Stanley last month delivered the valuation proposals to Uber, the WSJ report said.

The company hired Nelson Chai as its chief financial officer in August, filling a long-standing vacancy.

Uber declined to comment.

In September the company said it was on track to go public next year and has no plans to sell its self-driving car research arm.

The ride-hailing company will not sell its Advanced Technologies Group “at this time,” Mr Khosrowshahi told Reuters in an interview.

“Ultimately, it is a big asset that we are building and we can monetize that in whatever way we want to. It’s not something we’re thinking about it at this point,” he added.

Uber is “quite optimistic” it can resume testing of self-driving cars later this year after a fatal crash involving an autonomous Uber car in Tempe, Arizona in March, Mr Khosrowshahi said. Federal regulators are investigating the crash.

Advanced Technologies Group will “absolutely” be a part of Uber after the initial public offering, but it will also partner with other companies that are building self-driving technology, he added. “We want to get the technology ready for prime time as soon as possible,” he said.

Last month, Toyota Motor Corp said it would invest $500 million in Uber to jointly develop self-driving cars. “We are incredibly happy to start with Toyota but it’s not going to end there,” he said.

Reuters reported in July that Uber was being probed by the US Equal Employment Opportunity Commission for alleged gender discrimination on issues such as pay.

Ride-hailing company Lyft Inc, a competitor to Uber in the US has chosen JPMorgan Chase & Co, Credit Suisse and Jefferies as underwriters for its initial public offering, slated for the first half of 2019, according to a person familiar with the matter.

The source did not want to be identified because Lyft’s plans were still private.

Reuters had earlier reported that Lyft was in talks with JPMorgan to lead its IPO, after rivals Goldman Sachs and Morgan Stanley decided not to pursue such a role out of loyalty to another IPO hopeful and Lyft’s larger competitor, Uber Technologies Inc.

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