Online auto retailer Vroom Inc. saw its shares more than double on Tuesday (June 9) on their first day of trading following the company’s initial public offering (IPO). The firm’s stock traded as high as $48.88, up 122.2 percent from the stock’s IPO price of $22. However, it later pulled back a bit to close at $47.90, up 117.7 percent.
Vroom sold some 21.2 million shares and granted underwriters an option to buy as much as about 3.2 million more, raising more than $400 million. The sale valued the company at some $2.5 billion, but Tuesday’s rally took that over $5 billion. In a June 2 announcement, the firm initially estimated the IPO price at $15 to $17 a share, then raised it to $18 to $20 ahead of the final $22 pricing.
The stock, which trades on the NASDAQ under the symbol “VRM,” is rallying even though Vroom lost $41 million on $376 million in revenue in its latest quarter. That compares to a $27 million loss on $235 million in revenue for the same period last year.
The company had previously raised $254 million in a Durable Capital Partners-led Series H funding round in December of 2019. T. Rowe Price Associates, L Catterton and others participated.
Vroom has created a platform that puts the process of purchasing a vehicle directly under the control of buyers and sellers, without any car dealer or other intermediary needed.
In a recent conversation with Karen Webster, Vroom CEO Paul Hennessy said the firm has seen a “small chilling factor on the business” from the COVID-19 pandemic. However, he noted that consumers still want to buy and sell cars even in today’s turbulent times. They’re also more receptive than they’ve ever been to using a digital channel for car purchases or sales, he said.
Hennessy added that many consumers didn’t really like the auto dealership experience even before the pandemic, and the hurdle was getting them to try that first digital purchase. The CEO believes the pandemic and the related rise in online buying could be the jolt the industry needed to promote a much quicker adoption of digital car sales.
Vroom’s IPO comes as a spate of FinTech, InsurTech and other financial services firms staged or announced what seem likely to be successful public offerings. Actual or expected strong IPOs for Lemonade, Shift4 Payments and other companies are a nod to the sea change underpinning the financial space in general, as well as recognition by investors of the “great digital shift” that seems to be underway.
As PYMNTS has noted, the overarching theme is that digital marketplaces can simplify how things have traditionally been accomplished, jettisoning paper and face-to-face meetings.
BuildOps has raised $127 million in a Series C funding round to accelerate the deployment of artificial intelligence (AI) technology in its business platform for commercial contractors.
The round makes the company a unicorn, with a valuation of $1 billion, and cements its position in the industry, BuildOps said in a Friday (March 21) press release.
“I talk to contractors every day — HVAC pros, plumbers, electricians — and they’re busting their backs keeping our world running, but the deck’s stacked against them with staffing shortages, skyrocketing costs and tech that is stuck in the Stone Age,” BuildOps CEO Alok Chanani said in the release. “It fires me up because they deserve better — tools that don’t just keep up but actually let them run circles around the chaos.”
The BuildOps platform includes project management, service, dispatching, invoicing and AI-powered automation, according to the release.
With the new funding, the company plans to add more AI technology for predictive analytics, scheduling and real-time project tracking, the release said.
The platform serves contractors across the U.S. and Canada, per the release.
Paul Madera, founding partner at Meritech Capital Partners, which led the funding round, said in the release that the commercial contractor industry is a large industry that is “wide open for BuildOps.”
“BuildOps is the first enterprise software solution we’ve seen that actually gets it and fills an industry-wide need: a platform that doesn’t just patch holes; it facilitates control and management of workflow from the shop floor to the job site,” Madera said.
Hardware chains Home Depot and Lowe’s said in recent earnings calls that they are focusing on professional customers amid a slowdown in do-it-yourself activity.
Home Depot has seen growth in its pro segment and is working to improve the shopping experience for professionals through digital upgrades like job site deliveries, bulk pricing and personalized accounts, executives said during a Feb. 25 earnings call.
Lowe’s is investing strategically in its digital and in-store offerings to enhance value and convenience for pro customers, according to the company’s Feb. 26 earnings call. The company’s priorities include elevating customer experiences, leveraging loyalty programs and delivering simplified omnichannel services.
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