Summary List Placement
Auto1 Group, a European platform for used car sales, could IPO in Frankfurt as early as next month at a higher-than-expected valuation, Insider understands from a well-placed source.
The company has hired Goldman Sachs, Citi and BNP Paribas as global coordinators of its initial public offering, per Reuters.
During the third quarter of 2020, the eight-year-old’s startup’s valuation was mooted at around €5 billion ($6.1 billion).
Insider now understands the valuation is likely to land north of $8 billion. The higher price target is thought to reflect the company’s improved financials and the strong performance of its US competition.
Auto1 declined to comment.
The company announced publicly on Wednesday that it planned to float on the Frankfurt Stock Exchange in the first quarter of 2021, aiming to raise €1 billion ($1.2 billion). It did not comment on valuation.
Founded in 2012 by Christian Bertermann and partner Hakan Koc, Auto1 has so far brought in $1.4 billion in funding from investors including the SoftBank Vision Fund and is the top platform for buying and selling in Europe’s approximately €600 billion ($730.5 billion) used car market.
The company’s third quarter revenues were up 90% year-on-year, and the firm reported an 82% increase in the number of cars sold. The company also reported adjusted EBITDA of €16 million ($19.5 million), while gross profit margin grew from 9.5% to 11.3%.
Vroom, a US rival also founded in 2012, floated on the Nasdaq in June 2020 and initially surged from $22 IPO price to more than double that. The share price has since pared to $38.89 (as of the close of trading on Wednesday) giving the company a market cap of around $5 billion.
Carvana, another publicly listed user car company in the US, reported a revenue rise of 38% year on year in the third quarter of 2020 to $1.3 million. It trimmed its net loss to $7 million for the quarter, from $30 million over the same period in 2019. The company has seen its share price skyrocket from $113 on the day Vroom went public to $289 — a 155% increase. Carvana now has a market cap of almost $50 billion.
The jewel in Auto1’s crown, and the reason investor excitement has risen, is its direct-to-consumer business Autohero. Autohero is the company’s online used car sales service, similar to UK service Cazoo and Carvana’s offering, which has seen tremendous growth in 2020 amid the coronavirus pandemic.
SEE ALSO: Europe’s tech unicorns are eyeing the booming IPO market for 2021 and hoping to bring in billions. ‘I’ve never seen anything like this in my whole VC career.’
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Source:: Businessinsider – Tech