Lyft will use the money to help keep the operation afloat. It will also give it the resources to invest in expansion and new technology. Beyond that, the beneficiaries of the IPO include:
RELATED: City of San Francisco has concerns about the impact after Lyft goes public, other IPOs
Executives and managers, who joined the company on the promise of a potential windfall when Lyft went public.
- Early investors who put money into Lyft when it was starting up will get repaid and walk away with millions of dollars they can re-invest in other ventures.
- The IPO money can help pay down debt Lyft may have.
- Employees have to be happy, too, because of their stock options. But they will not be rich overnight.
Don't expect to see Lyft employees suddenly dropping a lot of C-notes all over the Bay Area. That's because there's something called a lock-up. That means they can't trade their shares typically for six months.
Lyft was very vague in its filing with federal regulators detailing what it'll do with its billions of dollars raised. However, there are educated guesses.
"Certainly you can imagine for marketing, for development of technology, for also to achieve growth, it takes people, even in the world of AI," said Dr. Mark Cannice, professor and department chair at the University of San Francisco School of Management.
RELATED: Uber and Lyft drivers demand changes before companies IPO
Investors don't seem concerned that Lyft isn't profitable. What they do see is future value in the data it's collecting from users.
"If you're a Ford and you're now building autonomous vehicles, but all you're doing is having them circle randomly, you'll be very hard to compete with an Uber or Lyft who's got years and years of data on where the demand is at different times, based on weather, based on every variable that you could incorporate," said Dr. Robert Hendershott, an associate professor of finance and fellow in entrepreneurship at Santa Clara University's Leavey School of Business.
Lyft now has the cash to save or spend as it sees fit.