Shopify – a Canadian firm that helps retailers move their goods more efficiently online – announced yesterday (May 20) that it priced its initial public offering at $17 a share. That is above the top end of a price range that investor demand had already pushed up. The firm sold 7.7 million shares for a total of $130.9 million raised. According to some analysts, this brings the firm’s implied market valuation to about $1.26 billion. U.S.-based investors bought most of the shares, according to one institutional investor who spoke to the The Wall Street Journal.
Going forward, Shopify plans to list its shares on the Toronto and New York stock exchanges.
Shopify was founded in 2006 and enables small and midsize businesses (as well as some big players like Tesla motors) to sell goods online. The Canadian company also works with physical retailers to convert sales and keep track of inventory. The company currently claims over 165,000 customers, more that twice what it ended 2013 with. Annual revenue has quadrupled to $105 million in 2014 from 2012, while losses have expanded as the company has grown, WSJ reported.
However, Shopify now enters a market place populated with powerful competitors like eBay and Square. Etsy, another recent eCommerce IPO, has struggled with stock price volatility as less forgiving investors are trying to make sense of the marketplace business model. Etsy priced its IPO at $16 a share, but on Day 1 of trading last month in New York, the stock reached $35.74, WSJ states. It has since dropped back into the $17 range as the firm reported greater-than-expected Q1 losses.
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