The competition between Uber and Lyft moved to the stock market. Both companies will debut in the market during the first quarter of this year, and the amounts that could be raised in their respective Initial Public Offerings (IPOs) could be huge.
At the end of December, Uber presented the papers to be listed on the New York Stock Exchange, and it is speculated that it could reach the $ 100 billion valuation after opening. But in parallel, the Lyft application, Uber competition, also works for your IPO. The company has a valuation of $ 15 billion, and among its investors are funds GSV, Founders Fund, Floodgate, Tencent, KKR, DiDi, Chuxing, Alibaba, Fidelity, Rakuten, Coatue and Fortress.
Both companies have in common that they were funded by venture capital funds, an industry that by 2019 could lead other companies out of the market. According to GSV's annual report, for this year, companies that have the potential to open the stock market are Coursera, valued at US $ 800 million, WeWork (US $ 45 billion) and Airbnb (US $ 31 billion) ), among others.
China in the USA
According to the report, Hong Kong was the world's largest IPO market in 2018, with 125 companies raising $ 36.5 billion, while in the New York Stock Exchange 64 companies were opened for $ 28.9 billion. And this growth promises to continue in the coming years, also leading to a shift in the focus of the venture capital industry.
Ricardo Morales, a founding partner of HMC Capital, an entity that manages some of these companies' funds and has a strategic alliance with GSV, says that in China the survey of VC companies and technology is already higher than in the US.
In this line, he explains that the new hubs for the venture capital industry are Europe and Asia, specifically France, London and China. "The most successful IPO last year was Ayden, valued at $ 14 billion, up 98 percent after opening and is Dutch, processes payments from Netflix and Facebook, and Spotify is Swedish," he says.
You and pc
But why is change taking place? According to Morales, in the US market there are many people competing, companies like Facebook do not go out every day, and the circle of investors that can access these companies is small. "There are funds that do not accept new investors 10 or 15 years ago," he explains.
According to the executive, this circle closes more and more as the same companies in the process of growth seek certain funds for their experience: "already have done about 500 transactions before, know how to consolidate platforms, administration and accounting systems with which they provide support the companies in which they invest, lawyers who advise and structure the operations ".
And, moreover, the terms are more and more extended. According to Morales, "Spotify has conducted about 20 rounds of private financing. Now, companies are looking to develop before opening the capital, so as not to have the quarterly quarterly public market stress."
In relation to his experience, he points out that last year they entered the property of Spotify (which in the end was not public) and Lyft, but through two different packages that came with the GSV. However, he says that these shares were placed on the secondary market by those seeking to exit before the company opened to the stock market, seeking liquidity.
On the profitability of venture capital investments, the executive details, he reaches the annual average of 24% in the last 10 years, although "it is invested in 20 or 40 firms because it can lose half, a private equity fund loses 20%. % of the companies in which it was invested, "he says.