, which competes with traditional used car sellers such as AutoNation (AN)
and CarMax (KMX)
as well as internet car dealer Carvana (CVNA)
, priced its stock sale at $22 a share — above its expected range. The stock rose to above $44 shortly after it began trading.
The company has impressive financial backers. Vroom’s top investors include venture capital firm General Catalyst Group, mutual fund company T. Rowe Price (TROW)
and Cascade investment, a firm controlled by Microsoft (MSFT)
co-founder Bill Gates. AutoNation also owns a nearly 5% stake in Vroom.
Several other high-profile companies have also debuted on Wall Street
in the past year thanks to mergers with so-called special purpose acquisition companies, blank-check firms that exist for the purpose of being acquired by a private company.
Richard Branson’s Virgin Galactic (SPCE)
, online and fantasy sports site DraftKings
and electric-truck company Nikola
have all done deals with these special acquisition companies in order to go public.
Vroom, like many newly public companies, has reported strong sales growth compared with a year ago. The solid debuts for Vroom, ZoomInfo and others are further signs of the strength in the stock market.
It also shows that investors aren’t necessarily scared of startups, despite the debacle at WeWork
and poor showings for newly public companies like Casper (CSPR)
and SmileDirectClub (SDC)
This could lead other private companies, including so-called unicorns like Airbnb, DoorDash and Robinhood to reconsider the idea of going public