Uber’s stock-market performance could have impact on competitors’ valuations
Uber Technologies Inc.’s stock performance following its expected Wall Street debut Friday could have significance for a range of companies in ride-hailing, food delivery and other emerging transportation services.
One of those is Postmates Inc., whose delivery platform is similar to Uber Eats. Postmates will be watching Uber’s trading to try to gauge market appetite for its own coming initial public offering, which is planned for June or July, people familiar with the matter said.
Postmates generated roughly $400 million in revenue in its latest fiscal year and has seen sharp revenue growth in recent months, two of the people said.
The San Francisco-based company, which has raised almost $700 million in private capital, has said it expanded its geographic reach by adding more than 1,000 cities on its platform since December. Postmates isn’t profitable, and its spending on sales and marketing has gone up in this time, the people said.
Yet it is still smaller than the Uber Eats business, which according to Uber Technologies’ IPO prospectus brought in $1.46 billion in revenue last year, or $759 million in net revenue excluding driver incentives and referrals.
Postmates was last valued at about $1.85 billion in a private investment round earlier this year. Uber Technologies’ market cap could affect Postmates’s because it is indicative of investor interest in the overall category. The IPO also could have consequences for DoorDash Inc., another food-delivery startup that was valued at more than $7 billion in its last funding round, according to PitchBook.
On Thursday, Uber priced its IPO at $45 a share. At that price, the company would raise $8.1 billion and command a valuation of about $82 billion. The shares are expected to started trading Friday on the New York Stock Exchange.
Uber’s market capitalization and performance in public markets “will have a directional impact on valuations,” said Atish Davda, chief executive at EquityZen, an online platform for pre-IPO equity trading.
Mr. Davda said the market reaction gets factored in to valuing competing businesses, but there isn’t a simple calculation. “If you’re a food delivery company, what you can’t do is take Uber’s revenue multiple and apply it to your business because Uber likely has two things you don’t: other business lines and scale,” he said.