Shares of e-commerce tech firm Borderfree soar in debut

Fri Mar 21, 2014 3:35pm EDT

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(Reuters) - Borderfree Inc's (BRDR.O) shares rose as much as 33 percent in their debut on Friday, valuing the e-commerce technology provider at about $648 million as the company focuses on adding clients outside the United States and cutting logistics costs for its customers.

Borderfree now serves only U.S. retailers, including Macy's Inc (M.N), Aeropostale Inc (ARO.N) and Under Armour Inc (UA.N).

"We've started having conversations with retailers based outside the U.S.," Mike DeSimone, the chief executive, said in an interview.

"Our primary growth path forward is to continue to drive down logistics costs for our customers," DeSimone said. "We'll be able to invest a bit more heavily in that."

The company raised about $80 million from its offering of 5 million shares, which were priced at $16 each, the top end of the expected price range. The shares opened at $21 and rose to a high of $21.25. Shares were up 20 percent at $19.30 in late trade.

Borderfree's revenue comes from fees paid by customers, based on a percentage of sales generated through its platform.

Overseas consumers are expected to spend $24 billion on physical goods from U.S. online retailers in 2014, the company said, citing a study by Forrester Research Inc.

In its IPO filing, Borderfree said it was seeing a big opportunity from U.S. retailers looking to tap international customers through e-commerce offerings.

However, the company faces competition from e-commerce giants such as eBay Inc (EBAY.O), which is helping U.S. merchants sell oversees, and Amazon Inc (AMZN.O), which is spending heavily on building distribution warehouses outside the United States.

Pitango Venture Capital Group is the biggest shareholder in Borderfree with a 27 percent stake, followed by Adams Street Partners, which owns 18 percent.

Borderfree reported a loss of $654,000 for 2013, compared with a profit of $192,000 the previous year. Revenue, however, rose about 36 percent to $110.46 million.

Credit Suisse and RBC Capital Markets were among the lead underwriters for the offering.

(Reporting by Avik Das in Bangalore and Phil Wahba in New York; Editing by Don Sebastian and Leslie Adler)

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