Exclusive – JPMorgan in discussion to direct the Lyft IPO: sources

(Reuters) – JPMorgan Chase & Co (JPM.N) is in talks to direct the initial public offering of Lyft Inc. as underwriter, after rivals Goldman Sachs Group Inc. (GS.N) and Morgan Stanley (MS.N) decided not to pursue such a role out of loyalty to another hope of IPO, Lyft's biggest competitor, Uber Technologies Inc., according to people familiar with the subject.

This decision illustrates the calculations that often guide the pursuit of such mandates by the world's largest investment banks. Goldman Sachs and Morgan Stanley have helped the carpool company Uber raise funds in the past and are in the lead for leading positions in its IPO, sources said.

Last year, Reuters reported that Lyft was looking to hire an IPO advisor who would help select subscribers and coordinate the process.

Since then, Lyft has hired the IPO consulting firm Class V Group LLC and is planning an IPO in 2019, sources said. Uber also said it was targeting an IPO in 2019, although it is behind in its preparations and is not yet looking to hire subscribers.

Several other investment banks are expected to join JPMorgan as an underwriter of the Lyft IPO. There is no certainty that the bank will guarantee the coveted underwriting position of "lead left," sources said.

Lyft plans to interview the investment banks next month, setting up its list of subscribers on the stock market, the sources added, warning that no role was officially attributed.

The sources asked not to be identified because the case is confidential. Lyft, JPMorgan, Goldman Sachs, Morgan Stanley and Group V all declined to comment, while Uber did not respond to a request for comment.

The Lyft and Uber IPOs will test investors' tolerance for the lack of profitability of iconic technology unicorns. Both companies have achieved positive results in attracting drivers and entering new markets, even though in recent years they have been able to reduce their losses.

Like Uber, Lyft offers an application that allows passengers to move on their smartphones. It was founded in 2012 by technology entrepreneurs John Zimmer and Logan Green, three years after Uber.

Lyft raised $ 600 million in its last round of financing in June, led by Fidelity Management, doubling its valuation to $ 15.1 billion in just over a year. It operates in approximately the same number of US cities as Uber, as well as in Toronto, Canada.

Lyft investors, which has a 35% market share in the United States, include AllianceBernstein, Baillie Gifford and KKR & Co Inc. (KKR.N).

Uber, under the leadership of Dara Khosrowshahi, who became CEO a year ago, juggled investments in new markets while pulling out of the others, where he was losing millions of dollars. It sets up services such as food delivery and freight transport, as it seeks new revenue and perhaps a path to profitability, outside of its core business.

Last month, Toyota Motor Corp. (7203.T) agreed to invest $ 500 million (£ 379.4 million) in Uber to work together to develop autonomous cars. The investment values ​​Uber at $ 76 billion, up from the $ 72 billion valuation Uber received in an agreement with Alphabet Inc. (GOOGL.O) Waymo standalone unit this year.