Uber beefs up its IPO syndicate with more underwriters

Uber has added half a dozen investment banks, including Bank of America Corp, Citigroup Inc, Barclays Plc, Deutsche Bank AG, Allen & Company, and JMP Securities, to its IPO underwriting lineup.

According to sources familiar with the matter at hand, Uber Technologies Inc has hired a string of investment banks to its syndicate as its ramps up efforts for its initial public offering.

Like Uber, Lyft Inc is also racing to list itself in the stock market by the end of this month. While Uber may not beat beat Lyft to an IPO, its preparations underscores its aim to provide it flexibility to go public as early as the first half of 2019, said sources.

Sources say, Uber has added half a dozen investment banks, including Bank of America Corp, Citigroup Inc, Barclays Plc, Deutsche Bank AG, Allen & Company, and JMP Securities, to its IPO underwriting lineup.

The new additions will support Morgan Stanley and Goldman Sachs Group Inc, which Uber hired late in 2018 to lead its IPO, said sources. Uber could hire additional bank in the coming weeks to complete its IPO syndicate.

Sources have preferred the cover of anonymity since the matter is confidential.

Representatives for Bank of America, Barclays, Citigroup and JMP Securities declined to comment.

Uber, Allen & Company and Deutsche Bank did not immediately return requests for comment.

While several investment banks held off pitching Lyft for a role in its IPO hoping it would be hired for Uber’s IPO instead – an offer which is likely to be more lucrative and high profile. However, JMP Securities managed to get on both IPO syndicates, proving that such an overlap is very much possible, albeit with more junior underwriting roles.

Lending relationships between the companies and the banks have proven to be important in winning IPO roles.

Case in point: in 2018 Lyft’s top-tier of seven underwriters was responsible for around a quarter of capital raised, compared to more than 40% for the six top-tier banks that Uber has hired so far, according to Dealogic.

Just like Lyft, Uber had also filed confidentially for an IPO with the U.S. Securities and Exchange Commission in December 2018. Its bankers have indicated it could be valued at as much as $120 billion, though some analysts have pegged its value closer to $100 billion based on the earning figures it discloses.

Sources say, Lyft’s valuation could be close to $25 billion in its IPO.

Incidentally, earlier this week, Uber had agreed to pay $20 million to settle a lawsuit brought nearly six years ago by drivers who claimed they are employees, and not independent contractors.

Uber continues to face thousands of arbitration claims from drivers who are not covered by the settlement.

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