Vroom, the US-based automotive e-commerce platform that counts car dealership owner AutoNation as an investor, will go public today in a $468m initial public offering on the Nasdaq Global Select Market.
The company increased the number of shares in the offering from 18.8 million to 21.25 million, and priced them at $22 each, above the $18 to $20 range it set last Friday, itself an extension of the $15 to $17 range on which it had originally decided. The offering values it at more than $2.5bn.
Vroom’s online platform allows users to buy reconditioned vehicles from sellers including dealers, car rental services and auctions. It increased revenue from $855m in 2018 to $1.91bn the following year, though its net loss also rose, from $85.2m to $143m, over the same period of time.
The IPO follows $721m in funding, Vroom having most recently raised $254m from L Catterton, T. Rowe Price Associates, General Catalyst, Durable Capital Partners, Cascade Investments and Pico Co-Investments in December 2019 at a $1.5bn valuation.
AutoNation invested $50m to lead a $146m series G round for the company in late 2018 that included Fraser McCombs Capital, and existing investors including L Catterton, General Catalyst and accounts advised by T. Rowe Price.
L Catterton is Vroom’s largest shareholder, the owner of a 20.6% stake diluted to 16.8% in the offering. Its other notable investors are T. Rowe Price (13% post-IPO), Cascade Investment (5.9%), General Catalyst (5.2%) and AutoNation (4.8%).
Goldman Sachs, BofA Securities, Allen & Company and Wells Fargo Securities are joint lead book-running managers for the IPO while Stifel, William Blair, Baird, JMP Securities and Wedbush Securities are co-managers.
The underwriters have the 30-day option to buy nearly 3.19 million more shares, which would boost the size of the offering to approximately $538m.
