When it comes to startups, there are many companies in the silicon valley which are running successfully even after not booking any amount of profits. Lyft is that tech startup from silicon valley which has recently filed for IPO, and in its prospectus, it’s been stated that the company hasn’t recorded any amount of profits previously. Reports show that Lyft has indicated that it might not be able to generate revenue in upcoming years also. Currently, many startups are trying to go public to get a sufficient amount of money to sustain in the future.
If we look into Lyft’s financial records then in last year this tech startup earned a revenue of $2.2 billion and booked a net loss of $911 million. Startups are mostly funded by private investors who can handle a massive amount of losses; also that’s why so many companies which are not performing well financially are still running. Facebook and Google were one of those startups which were profitable even before it went to public. However, if we look into other public companies such as Twitter, Shopify, Snapchat, Dropbox, etc. then these companies didn’t book profit before they went public.
There are many examples of companies which were valued in billions of dollars by private investors. But, when they went to the public which companies did not well. Now if we look at Lyft then its statement which shows that a company which not earning a single amount of profit might not bring the right amount of capital from the public. General investors like to own those stocks which have a good future even if their present is terrible. On the other hand, Uber, Airbnb, Slack are also those companies which have filed for IPO. However, in Lyft’s case, it seems like everything’s wrong and that’s why some experts are skeptical about its IPO.