Online car retailer Vroom enjoyed an auspicious IPO on Tuesday, with its initial offering of 21,250,000 shares raising $468 million, well above its target of $356 million.

Shares of Vroom (NASDAQ: VRM) started trading at $22, but investor demand more than doubled the price by midday Tuesday.

Underwriters, led by Goldman Sachs and BofA Securities, have a 30-day option to purchase around 3 million additional shares.

Although IPOs have been few and far between during the pandemic, New York-based Vroom appears to be the rare company whose value has increased during the crisis.

A direct rival of Arizona-based Carvana, Vroom offers a touchless online buying experience, as well as home delivery — both services appeal to shoppers seeking to avoid unnecessary human contact.

Last year, Vroom reported revenue of $1.2 billion, up 39% from 2018, according to the firm’s IPO filing. It reported a loss of $143 million in 2019, compared to a loss of $85.2 million the previous year. 

Revenue in the first quarter of this year reached $375.7 million, up 60% year-on-year. It showed a net loss of $41 million, compared to a loss of $27 million in Q1 2018. 

In comparison, Carvana reported 2019 revenue of $3.94 billion, double that of the prior year. Its income for Q1 2020 was $1.1 billion, up 45% year-on-year, the slowest growth quarter ever for Carvana.

Like Vroom, Carvana has yet to turn a profit. In Q1 2020, it lost $184 million, compared to a loss of $84 million a year prior.

For investors, one differentiator between the two companies is that Vroom outsources most of its vehicle reconditioning, home delivery and warehousing to third parties. Vroom has a huge reconditioning center and car lot in Texas, but it contracts most of its reconditioning work to third parties at 13 locations across the country. So far, it has primarily used third parties for both vehicle delivery and pick-up of trade-ins, according to its IPO filing.

Vroom’s expansion plans will follow a “hybrid approach” of outsourcing and proprietary services.

Carvana, by contrast, has invested heavily in in-house services, with eight inspection and reconditioning centers, each employing approximately 400 staff, across its main markets in the Midwest, New England the Southeastern U.S. Carvana also has 22 car vending machines where customers can pick up purchased vehicles. It handles home delivery and trade-in collections through its own logistics network, only outsourcing long-distance deliveries, according to company presentations.

Vroom’s IPO gave the company a market valuation of about $2.5 billion. Carvana has a market cap of $19.3 billion.

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