CarGurus’ stock price jumped roughly 80 percent above its initial public offering price of $16 per share on its trading debut Thursday, marking the first Massachusetts tech company to go public in 2017.
The Cambridge company’s stock was hovering around $29 per share late Thursday morning. The company raised $150 million the day before after pricing its IPO at $16, above its expected range of $13 to $15. The company is listed under the symbol “CARG” on the Nasdaq Global Select Market.
“Today is a significant milestone for CarGurus that reflects the hard work of the entire CarGurus team as well as the support and enthusiasm we’ve had from our consumers, dealers, partners and investors over the years,” Langley Steinert, CarGurus’ CEO and founder, said in a statement to BostInno. “Our mission to build the world’s most trusted and transparent online automotive marketplace continues, and we’re excited to enter this new chapter.”
“CarGurus, Wayfair, Runkeeper, Kayak et. all will hopefully inspire other awesome founders that you can build a special consumer company in this town.”
CarGurus’ debut on the stock market marks a significant win for the Boston area, where big consumer tech successes are less frequent than on the West Coast.
“CarGurus, Wayfair, Runkeeper, Kayak et. all will hopefully inspire other awesome founders that you can build a special consumer company in this town,” Bijan Sabet, a local venture capitalist who has invested in Tumblr, Twitter and Wayfair, told BostInno in an email.
The online automotive marketplace has been a bit of an outlier in the tech world in that it has been profitable leading up to its IPO. In 2016, the company brought in $198.1 million in revenue with a net income of $6.5 million. For the first six months of 2017, the company’s revenue was $143.3 million with an $8.6 million net income.
The company also managed to build a large, fast-growing business without raising much outside capital for its first eight years. Through 2014, the company had only raised roughly $5 million — from friends and family, Steinert previously told BostInno — but then it raised a $68 million round in 2015, followed by $60 million in 2016, the latter of which was backed by T. Rowe Price, Fidelity Brokerage Services and other investors.
“I am very impressed with the capital efficiency and execution at CarGurus,” Sabet said.
Without the use of any national TV advertising until this year, the company has managed to become the most visited online car marketplace in the U.S., according to comScore. In this year’s second quarter, the company said it had roughly 61 million average monthly sessions in the United States, up from about 45 million in the same period last year.
This marks Steinert’s second big consumer win. He previously helped found Needham-based TripAdvisor and served as its chairman until 2005, a year after the company was sold to Expedia. TripAdvisor was later spun off as a public company in 2011.
“I’ve founded two companies in the Boston area, and I am extremely grateful to be a part of this vibrant technology hub, with its strong ethos of innovation and access to exceptional employee talent,” Steinert said in a statement.