IPO

CommerceHub Mulls IPO At $2B Valuation

IPO

CommerceHub, which makes eCommerce software, is preparing an initial public offering (IPO) that may value the firm at over $2 billion, according a report in Bloomberg citing unnamed people familiar with the matter.

The private-equity-backed firm is working with Morgan Stanley on the IPO, which could launch in the fourth quarter or sometime in 2021, the report said.

The company could engender takeover interest, as many highly-coveted firms do. And the value could be targeted as high as $3 billion, one of the sources reportedly said.

CommerceHub did not immediately respond to a request for comment, Bloomberg said, noting no final decisions have been made.

The company has worked with over 12,000 retailers and brands over the years, including big names like Dell and Best Buy, for needs such as fulfilling orders and setting up deliveries. The coronavirus pandemic, with its much-publicized shift to digital, has boosted the need for CommerceHub's services, Bloomberg wrote, quoting remarks made by company Co-Founder and CEO Frank Poore in June.

“The lasting impacts of Covid-19 aren’t going away and it is critical that retailers pivot their investments to where consumers are spending their money: online,” Poore said at the time, according to the report.

This year has been a rough one for the markets, but the IPO market has been strong as of late. Companies such as Lemonade and nCino have gone public during the pandemic, more than doubling their values with the offerings after they did so.

NCino, for example, announced it was planning to raise as much as $253.5 million in its IPO, which would allow it to raise around 21 percent more than it would have otherwise. Lemonade, since its IPO earlier in the summer, has expanded its offerings from homeowners insurance to also include health insurance for cats and dogs.

Another example is online health insurance brokerage GoHealth, which raised $913 million and saw shares skyrocketing afterwards.

Other companies, like Palantir Technologies, Asana and Unity Technologies, are preparing to go public later this year.

CommerceHub, founded in 1997 as a spinoff from Liberty Interactive, went private in 2016 for $1.1 billion under the guidance of GTCR and Sycamore Partners.

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