Tian Tian Ventures Set for 2019 IPO Following Lyft’s Success

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TTgo is preparing for an early IPO after encouraging performance by rivals Lyft.

The ride-hailing platform by US venture capitalist Tian Tian Ventures recently expanded into China’s $30 billion ride-hailing market and looks set to join the wave of highly anticipated multibillion-dollar tech IPOs in 2019.

Lyft’s eye-catching performance is expected to kick off a flurry of tech IPOs and has whetted investors’ appetite for more. San Francisco ride-hailing company Lyft saw a solid first day of trading on Wall Street, with its stock closing up 9 percent at $78.29.

LYFT, a 7-year-old company, raised more than $2 billion and ended the day worth $26 billion, making Lyft the largest US IPO of 2019 to date. It is expected that TTgo could achieve similarly impressive performance, as it gears up for its own listing this year.

TTgo’s bankers and investors believe the company could reach a valuation of $5 billion, making them third largest ride-hailing IPO, behind Lyft and Uber’s projected IPO, also in 2019. Their conviction has only been strengthened by Wall Street’s reception of Lyft.

One investor commented, “$5 billion [valuation for TTgo] is pretty realistic, considering Lyft’s initial performance. I believe the market is hungry for more, 2019 will be huge in terms of IPOs.”

It is clear that the market values high growth in revenue, riders, drivers and trips than actual profitability. Last year, Lyft’s losses rose 32 percent to $911 million and its prospectus warned that it may never “achieve or maintain profitability in the future.”

Lyft itself have faced issues retaining drivers, who recently have protested pay cuts and other issues; so far, it has increased revenue by reducing how much drivers get from each ride, a move that has proven unpopular. This is an unsustainable method in the long term, as drivers will start looking elsewhere if they are not paid enough.

TTgo, on the other hand, offers investors and drivers a safer and more reliable proposition. It employs a high growth expansion strategy that focuses on asset accumulation as well as market share. Rather than hiring drivers as “independent contractors” like Lyft and Uber, TTgo owns its entire car fleet as well as offering share options to the drivers or fleet managers as they call it, a move that has been well received since its inception. This is a powerful concept, especially in China, where Didi Chuxing employs more than 21 million drivers. Potentially, TTgo could grab a significant portion of the huge Chinese market.

“The key concept to our growth strategy is asset accumulation – both tangible and intangible. We view drivers as real assets to the company, they are the key to our growth. TTgo intends to own 2 million vehicles by 2022 and we want our fleet managers to be part of the process. They are also shareholders with the same vision of taking TTgo to the next level.” CEO of Tian Tian Ventures, Benjamin Berger stated.

Amidst the optimism surrounding these high-profile IPOs, 2019 could turn out to be a bumper year for tech startups and investors alike.

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ALLEN MASON
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