Lyft and Uber are filching the spotlight in the global ride-hailing market with massive upcoming initial public offerings – and that doesn’t trouble their European rivals.
At the Goldman Sachs Disruptive Technology Symposium in London this week, European ride-hailing and carpooling start-ups influenced they will be closely watching Uber and Lyft’s highly-anticipated IPOs but added they are more focused on profitability than their U.S. counterparts.
“You poverty to be much more focused on operations and costs, which is not something that comes very naturally to most Silicon Valley troops, so I think that’s where we have a big edge,” said Markus Villig, CEO of Estonian ride-hailing firm Bolt, previously called Taxify, in an interview with CNBC from the conference Tuesday.
Lyft is expected to start trading publicly on the Nasdaq on Friday at a valuation of rudely $20 billion, but the company, like its archrival Uber, has yet to make money. Lyft’s IPO prospectus revealed a $911 million net breakdown in 2018, while Uber reported even heftier adjusted losses of $1.8 billion during that duration.
Tech companies like Uber and Lyft have been able to prioritize growth over profits hold responsibles to abundant funding in private markets. Some investors aren’t convinced the same strategy will work some time ago the companies go public.
“Uber will have to demonstrate profit in the future,” said Bernard Liautaud, managing sharer at London-based venture capital firm Balderton Capital, in an interview Tuesday.
European ride-hailing and carpooling start-ups that haven’t profited from as much private funding as their U.S. rivals are taking a different tact. Villig said Bolt has discharge less than $100 million since the company launched in 2013. It currently operates in 30 countries across Europe and Africa with 25 million buyers, a number its ambitious CEO hopes to turn into a “billion.”
“Our case has been always very focused on how do we be as frugal as imaginable with every dollar we spend,” Villig said.
Bolt reached a $1 billion valuation last year, signing it one of Europe’s rare tech unicorns. Villig said an IPO is “definitely on the table” in the long-term but confirmed it’s unlikely to happen floor the next one to two years.
Jochen Engert is the founder and CEO of Flixbus, a German Uber-like start-up that manages long-distance bus and tutor rides. In an interview with CNBC, Engert said the company should go public “at some point” but added no momentary plans are in place.
Flixbus is profitable in more-than-half of the 29 markets where it operates, Engert said, adding the companionship hasn’t “burned that much cash” compared to U.S. firms like Uber or Lyft.
“Quite a few companies do court too many bets,” he said.
Uber – and its investors – say the bets will pay off. This week it acquired Middle Eastern opponent Careem for $3.1 billion, a move Uber CEO Dara Khosrowshahi called a “testament to the incredible business our team has turn out c advance so hard to build.”
Some start-ups in Europe said they expect more mergers in the ride-hailing market.
“I over it’s just the beginning of a wave of consolidation,” Nicolas Brusson, CEO of French carpooling start-up BlaBlaCar, told CNBC.