That eye-popping figure is nearly double Uber’s valuation in a fundraising round just two months ago and more than General Motors Co. , Ford Motor Co. and Fiat Chrysler Automobiles NV are worth combined.
Goldman Sachs Group Inc. and Morgan Stanley MS 5.24% last month delivered the valuation proposals to Uber, the people said. These documents, which typically advise on how to position shares to potential investors, are a common step before banks are formally hired to underwrite IPOs.
The bank presentations show Uber gathering momentum toward an IPO that is among the most hotly anticipated on Wall Street and Silicon Valley and could come sooner than expected as the new-issue market sizzles. Founded in 2009 and sustained by an ample supply of private capital, Uber is seen as a bellwether for a crop of highly valued startups that have delayed tapping the public markets. Its expected debut comes as rival Lyft gears up for an IPO on a similar time frame.
Over the past year, Uber has labored through a series of scandals, from claims of workplace sexual harassment to the alleged theft of trade secrets from rival Alphabet Inc., and the ouster of co-founder Travis Kalanick. Its new chief executive, Dara Khosrowshahi, has sought to win back investors, drivers and riders who can now choose from a growing group of taxi smartphone apps.
Mr. Khosrowshahi has said the company is aiming for an IPO in the second half of 2019; at what valuation has been unclear. Uber last raised money, from Toyota Motor Co. in August, at a $76 billion valuation.
There is no guarantee Uber will go public within the expected time frame or at the valuation envisioned by investment bankers hungry for fees. The IPO market runs notoriously hot and cold, and though 2018 has been a strong year for technology and other issues, conditions could be less favorable when Uber is ready to list its shares. Indeed, one source said the banks are pitching the earlier listing in large part because of fears the IPO market will cool.
And any IPO process could also be complicated by factions among Uber backers, who received their shares over seven years at valuations ranging from as low as $50 million.
In documents distributed in recent days related to a potential bond offering—led by Morgan Stanley—Uber indicated it won’t be profitable for at least three years, according to people familiar with the matter. It expects to generate between $10 billion and $11 billion in revenue this year, according to the documents, compared with $7.78 billion last year.
As part of an agreement with investor SoftBank Group Corp. 9984 3.62% , Uber must go public by the end of next year, according to people familiar with the matter. If it fails to do so, Uber would have to allow certain investors—those who have put in at least $100 million or held shares for at least five years—to sell their stakes on the secondary market, these people said. That could damage Uber’s ability to control the price at which an IPO is ultimately set.
Lyft Inc., Uber’s most formidable U.S. rival, tapped JPMorgan Chase & Co., along withCredit Suisse Group AG and Jefferies Group LLC, to lead an IPO that may come earlier in 2019, The Wall Street Journal also reported Tuesday. The upstart’s valuation is expected to top the $15.1 billion it sold shares at privately this year.
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