US’s CarGurus shares surge more than 80% in IPO
Bengaluru — Shares of CarGurus, an online marketplace connecting buyers and sellers of new and used cars, jumped as much as 84% in their market debut on Thursday, giving the company a market capitalisation of more than $3bn.
The company has grown rapidly since it was set up by TripAdvisor co-founder Langley Steinert in 2006, and said in its initial public offering (IPO) filing that it had 61-million average monthly users and 5.4-million car listings in the US as of June 30.
The company’s IPO was priced at $16 per share, above the previously outlined $13-$15 range, and raised $150.4m. The stock touched a high $30.19 minutes after it started on Thursday, before easing slightly to trade at $27.90.
CarGurus generates revenue from charging subscription fees to its vast network of car dealers who pay to post their inventory on the website, according to the filing.
The company reported a 70% jump in total revenue to $143.3m in the six months ended June 30, while net income soared more than sixteen-fold to $8.6m.
Although it is early days for consumers to buy cars online in large numbers, much of the research is done on the internet — a trend the company is looking to capitalise on.
CarGurus’s main competitor, TrueCar, went public in 2014 and its shares have surged 184% in the past 12 months.
CarGurus had an active dealer network of more than 40,000 as of June 30, with operations in the US, Canada, UK and Germany.