Used car retailer Vroom raises $467.5m in US IPO

10 June 2020 (Last Updated June 10th, 2020 13:52)

Online used car retailer Vroom has reportedly raised $467.5m during its US initial public offering (IPO) amid the coronavirus pandemic.

Used car retailer Vroom raises $467.5m in US IPO
Vroom offers low-mileage, reconditioned vehicles and delivers directly to the customers. Credit: Kevin Spencer.

Online used car retailer Vroom has reportedly raised $467.5m during its US initial public offering (IPO) amid the coronavirus pandemic.

The retailer, backed by T Rowe Price Associates and L Catterton, sold its 21.25 million shares for $22 each, Reuters reported.

The value is higher compared to the company’s initial marketed range of $18 to $20.

Vroom, which filed for an IPO last month, hired Goldman Sachs Group, Bank of America, Allen & Co and Wells Fargo & Co as lead bookrunners for the offering.

Media reports suggest that Vroom saw its sales jump to more than twofold at its e-commerce business in the first quarter of 2020 as the pandemic restrictions customers switching to online shopping.

The company’s revenue for the first quarter ended on 31 March jumped 60% compared to the same period last year, Reuters reported.

Net loss attributable to the company’s common stockholders also fell to nearly $41.1m from $45.1m.

Vroom shares will list on the Nasdaq under the symbol “VRM”.

Headquartered in New York, Vroom leverages a data-driven technology platform that enables consumers to sell or buy vehicles from anywhere.

The company offers low-mileage, reconditioned vehicles and delivers directly to the customers.

In December, Vroom concluded a Series H funding round of $254m, led by the Durable Capital Partners. The funding increased its total capital raised to $721m.

In April, the company also partnered with convenience retail and petroleum wholesale industries technology solution provider PDI to launch new features for retailers and petroleum wholesalers.