(Reuters) - Shares of CarGurus Inc (CARG.O), an online marketplace connecting buyers and sellers of new and used cars, jumped as much as 84 percent in their market debut on Thursday, giving the company a market capitalization of more than $3 billion.
The company has grown rapidly since it was set up by TripAdvisor co-founder Langley Steinert in 2006, and said in its IPO filing it had 61 million average monthly users and 5.4 million car listings in the United States as of June 30.
The Cambridge, Massachusetts-based company’s IPO was priced at $16 per share, above the previously outlined $13-$15 range, and raised $150.4 million. The stock touched a high $30.19 minutes after it started on Thursday, before easing slightly to trade at $27.90.
CarGurus generates revenue from charging subscription fees to its vast network of car dealers who pay to post their inventory on the website, according to the filing. (bit.ly/2yc2O3C)
The company reported a 70 percent jump in total revenue to $143.3 million in the six months ended June 30, while net income soared more than sixteen-fold to $8.6 million.
Although it is early days for consumers to buy cars online in large numbers, much of the research is done on the Internet - a trend the company is looking to capitalize on.
CarGurus’s main competitor, TrueCar Inc (TRUE.O), went public in 2014 and its shares have surged 184 percent in the past 12 months.
CarGurus had an active dealer network of over 40,000 as of June 30, with operations in the United States, Canada, UK and Germany.
Reporting by Roopal Verma in Bengaluru; Editing by Saumyadeb Chakrabarty