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LONDON — Shares of SoftBank-backed used car marketplace Auto1 rallied 45% on Thursday following its debut on Germany’s Frankfurt stock exchange.
The company’s shares were priced at 38 euros ($45) for the initial public offering but they were up around 45% to 55 euros at the open. The shares fell to around 50 euros in mid-morning trade before picking up again to roughly 54 euros around midday.
Auto1 raised around 1.8 billion euros from newly-issued shares in the IPO.
The eight-year-old company, which is headquartered in Berlin, allows consumers and car dealers in Europe to buy and sell used cars on the internet. It claims that it sold over 615,000 cars and generated 3.5 billion euros in revenue across 30 countries in 2019.
Japanese tech giant SoftBank invested 460 million euros into Auto1 in January 2018, valuing the company at 2.9 billion euros. SoftBank took a 20% stake in the company at the time, according to the Financial Times.
While Auto1 isn’t yet profitable, Markus Boser, the chief financial officer at Auto1 Group, said in a statement ahead of the IPO that the company has “demonstrated its path” to profitability.
Steve Schlenker, managing partner of DN Capital, which was one of the first venture capital firms to back the company, hailed the IPO a success.
“Auto1’s journey from Berlin startup to one of Europe’s most highly valued tech companies demonstrates the superior quality of the German ecosystem, which has a long track record of building stellar e-commerce and marketplace companies,” he said in a statement.