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Shelved 2019 US listings create a crowded field for next year

on December 10, 2019

But in the absence of easy access to public markets, some companies are debating whether to go back to private market investors for fresh funding, given that many venture capital and private equity investors are searching for deals. “The private market is currently flushed with trillions of dollars of dry powder to continue funding private companies,” said Rashaun Williams, general partner of the All-Star Fund at Manhattan Venture Partners.

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Swelling U.S. IPO backlog points to crowded 2020 field

on December 10, 2019

“The private market is currently flushed with trillions of dollars of dry powder to continue funding private companies,” said Rashaun Williams, general partner of the All-Star Fund at Manhattan Venture Partners.

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As Lyft IPO nears, traders wonder whether the numbers match the hype

on December 3, 2019

Have the fundamentals improved that much in a few months? Santosh Rao, who evaluates IPOs at Manhattan Venture Partners, says the improvements have been only marginal. “Fundamentals did pick up in the fourth quarter. They are getting more efficient with the drivers and the incentives. But there is a little bit of hype too. You see the squeeze, demand is way above supply.”

Like many on the Street, Rao is trying to justify the nose-bleed prices Lyft is likely to command.

The biggest problem are the huge losses. The company had $2.2 billion in revenue last year with losses of $911 million.

And this is where the Wall Street guys really get into “magical thinking.” Rao explained the reasoning: “Revenues grew 100 percent in 2018, but losses only grew about 40 percent. In that sense, the margins are improving. The sequential progression is improving.”

Rao doesn‘t know when Lyft will make money, but he insists they have bought themselves a lot of time. “The cash burn was $350 million in 2018, but they have $2 billion in the bank, and they are going to raise another $2.5 billion or so in the IPO. So they have a little room. $4.5 billion divided by $350 million implies they have 10 years.”

When pressed on all this “magical thinking,” Rao admits, “A lot of investors just want growth at any price.”

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Lyft steering smoother ride to profitability by 2021 than Uber: analysts

on November 28, 2019

Lyft and Uber have two distinct business models that will impact the way forward, industry experts said. Lyft is focusing on ride-hailing in North America, whereas Uber is a global company with several businesses including food delivery and services for truck drivers.

“Lyft has a clear, defined path to profitability,” Santosh Rao, head of research at Manhattan Venture Partners, said in an interview.

Uber, on the other hand, has “too many moving parts,” he said, adding that the ride-hailing business is profitable but the other ventures are weighing Uber down.

Even so, Rao said he thinks both companies will reach their profitability goals around 2021.

“As long as there is a path to profitability, a few months here and there does not matter,” he said.

Fourth-quarter earnings will be key for Lyft since stock compensation and IPO lockup period expenses will be behind them, Rao said. While Lyft’s lockup period expired Aug. 19, Uber’s ended Nov. 6.

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Alibaba’s Hong Kong Debut Off To A Strong Start According To Pros

on November 28, 2019

Alibaba’s successful debut in Hong Kong “validates” not only its business model but validates the ability of the Hong Kong exchange to offer sufficient liquidity, early Alibaba investor Santosh Rao of Manhattan Venture Partners said Tuesday on CNBC’s “Worldwide Exchange.”

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Fitness Startup Peloton‘s Shares Fall in Market Debut

on November 26, 2019

“Companies will start prioritizing what the market is telling them they’re worth in the secondary market,” said Andrea Lamari Walne, a Silicon Valley-based partner at merchant bank Manhattan Venture Partners.

In secondary markets, investors buy and sell shares of a private company among themselves.

“Companies are taking a very hard look at secondary transactions as an indicator of the possible performance leading into whatever form of public company they’re going to be,” she added.

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Today is investing in a startup before it goes public.

on November 11, 2019

“The general level of interest in making investments before the IPOs is crazy, it’s in the clouds,” says Andrea Walne, a partner at Manhattan Venture Partners.

Entering before an IPO helps an investor build a large stake more easily In a traditional IPO, companies usually sell a limited amount of shares and investment banks decide who gets it. 

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Lyft offers up new perk-driven membership called Lyft Pink

on November 1, 2019

As most ConsumerAffairs readers know, ridesharing services have been on a rollercoaster ride for the last few years. One market observer thinks that this move might be just the thing Lyft needs to get it off that roller coaster.

“This is in line with the company’s original mission to replace car ownership with car renting/sharing,” Santosh Rao, Head of Research at Manhattan Venture Partners, told ConsumerAffairs.

“With a ubiquitous, end-to-end inter modal transportation offering, Lyft believes that it can usher in a world where people will not need to own a car and all the hassles that go with it — cost being the biggest one — and focus more on living their lives more fully.”

It’s too early to tell if and how much Pink might affect Lyft’s bottom line, but the signs are pointing in a positive direction for the company.

“With three strong sequential quarters right off the gate, a rational pricing environment, strong unit economics in its core market, and compelling operating leverage in the model with a clear path to profitability, we remain bullish on the Lyft story,” Rao said.

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How ordinary investors can grab their slice of the burgeoning shadow market for private tech companies

on October 28, 2019

“If you turned back the clock 15 years, and you wanted to invest in a high-growth business, you would go to the Nasdaq,” says Jared Carmel, co-founder of Manhattan Venture Partners, an investment fund that negotiates private stock sales.

“Today, that hyperbolic growth that you would normally see within the first 10  years of the company is behind them [when they go public].

For the traditional public market investor, whether you’re an institution or a retail investor, there has been little opportunity.

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The Big Money in Startups Comes From Investing Before the IPO

on October 23, 2019

“The overall level of interest in doing investments ahead of IPOs is insane—it’s through the roof,” says Andrea Walne, a partner at Manhattan Venture Partners LLC, which focuses on this market. “People feel as though they can lock in the same value as the VCs they admire and respect.” Her business card reads “Tomorrow’s IPOs Today,” with a trademark symbol above the phrase.

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