US-based automotive e-commerce platform developer Vroom filed for a $100m initial public offering on the Nasdaq Global Market on Monday that would enable car dealership owner AutoNation to exit.
Vroom runs an online marketplace where users can buy reconditioned vehicles in addition to accessing financing for purchases. It generally looks to source vehicles from commercial operators such as auctions, car rental services and dealerships.
The company recorded nearly 950,000 visitors to its platform in the first three months of this year, a period where it increased revenue approximately 60% year on year to more than $375m. Its net loss however grew from $27m to $41m.
The IPO proceeds will fund activities including marketing and technology development in addition to general operating expenses. Vroom furloughed roughly a third of its employees earlier this month and cut salaries for the rest of its workers.
Vroom had raised a total of $721m as of a $254m series H round in December 2019 led by investment adviser Durable Capital Partners and backed by General Catalyst, Pico Partners, Cascade Investment and affiliates of L Catterton and T. Rowe Price Associates, reportedly valuing it at $1.5bn.
The series H round came after a $146m series G in late 2018 that was led by AutoNation and which included Fraser McCombs Capital and existing investors L Catterton, General Catalyst, Cascade Investment and accounts advised by T. Rowe Price Associates including its New Horizons Fund.
The IPO filing did not reveal information on individual stake sizes but indicated that AutoNation owns 5% or more of Vroom’s shares, as do L Catterton, General Catalyst, Cascade Investment and funds and accounts advised by T. Rowe Price.
Goldman Sachs, BofA Securities, Allen & Company and Wells Fargo Securities have been appointed joint lead book-running managers for the offering.
