Online used car seller Vroom raises $467.5 million in upsized US IPOPosted On: June 9, 2020 By : AutoLife Team
Online used car seller Vroom Inc raised $467.5 million in its US initial public offering, the company said on Monday, as the IPO market picks up momentum after the COVID-19 pandemic placed many debuts on hold.
Vroom priced its IPO at $22, above the initially marketed range of $18 to $20, valuing the company, which is backed by funds such as T Rowe Price Associates and L Catterton, at $2.48 billion. The company sold 21.25 million shares compared with the earlier plan of 18.8 million shares.
Recent recovery in the US stock markets has led to a flurry of IPO-hopefuls entering the race. Royalty Pharma, which buys biopharmaceutical royalties, unveiled plans on Monday to raise up to $1.96 billion in an IPO.
Vroom, which had filed for an IPO last month, reported a more than twofold rise in sales at its e-commerce business in the first quarter of 2020 as the virus outbreak and stay-at-home orders stoked a surge in online shopping.
The company, which use digital tools to close deals and home delivers vehicles to customers, said revenue for the first quarter ended March 31 jumped 60 percent from a year earlier, and net loss attributable to Vroom’s common stockholders narrowed to nearly $41.1 million from $45.1 million.
Rival Carvana Co, which saw its stock plunge nearly 80 percent in a month, has recovered dramatically to be up 26 percent on-year as online car selling gains favor in the post-pandemic world.
Tech-driven insurance startup Lemonade Inc, which counts Japan’s SoftBank Group Corp and Alphabet Inc’s venture capital arm GV among its investors, also filed for a US listing on Monday.
Vroom shares will list on the Nasdaq under the symbol “VRM” on Tuesday.
Goldman Sachs, BofA Securities, Allen & Co and Wells Fargo Securities were the joint lead bookrunners of the offering. (REUTERS)