Vroom, the online automotive marketplace backed by car dealer owner AutoNation, set the terms for its initial public offering on Monday and would raise nearly $319m at the top of its range.
The offering is set to consist of 18.75 million shares being issued on the Nasdaq Global Select Market priced between $15 and $17 per share. A $17 price would value the company at $1.91bn.
Vroom runs an e-commerce platform enabling users to buy reconditioned cars from a range of dealers, rental services and auctions.
The company more than doubled its monthly visitors from 411,000 to 947,000 between Q1 2019 and Q1 2020, and boosted revenue from $235m to more than $375m, though its net loss rose from $27.1m to $41m.
AutoNation led Vroom’s $146m series G round in 2018, investing alongside Fraser McCombs Capital and existing backers L Catterton, General Catalyst and accounts advised by T. Rowe Price.
Vroom added $254m in December 2019 from investors including Durable Capital Partners, L Catterton, T. Rowe Price, General Catalyst, Cascade Investments and Pico Co-Investments at a reported $1.5bn valuation, taking its total funding to $721m.
AutoNation affiliate Auto Holdings is the owner of a 5.9% stake set to be diluted to 4.6% in the IPO. The company’s other key backers are L Catterton, which is set to hold 17.2% post-IPO, T. Rowe Price (13.3%), Cascade Investment (6%) and General Catalyst (5.4%).
Joint lead book-running managers Goldman Sachs, BofA Securities, Allen & Company and Wells Fargo Securities and co-managers Stifel, William Blair, Baird, JMP Securities and Wedbush Securities will have the 30-day option to buy just over 2.8 million more shares post-offering.
