Massachusetts-based CarGurus Inc. raised $150m in an initial public offering on Wednesday — and yesterday, they began trading on the Nasdaq.
The company’s had a pretty good ride so far: they priced 94m shares at $16 per share for an initial market cap of around $1.68B, and as of closing yesterday, the shares had gone up to $27.58, a gain of 72%
They kinda came out of nowhere
Founded in 2006, the car shopping website was bootstrapped for its first decade of existence, keeping a low profile up until now, despite touting 23m unique monthly users.
According to CarGurus CFO Jason Trevisan, the business is now “the largest platform for both consumers and dealers to find a car,” as evidenced by its partnerships with more than 90% of the auto dealership businesses in the US.
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The company reported $8.6m of net income on $143m in revenue for the first half of 2017 — a pretty big jump start, considering revenue was $191.1m with $6.5m in profit for the entire year of 2016.
In other words, CarGurus has been flying under the radar with some pretty juicy numbers.
Dancin’ to a different beat
The company’s success serves as a friendly reminder that startups don’t always have to raise gobs of cash to succeed: CarGurus was able to refuse traditional venture financing because they were cash-flow positive early on.
And that unwillingness to take on venture money is paying off big for their founder, Langley Steinert, as he owns 29% of its shares and still retains over 60% voting power.
The company plans to use the proceeds from the IPO to further expand internationally and to add infrastructure to eventually sell transaction-related services like escrow, warranties, and financing.