Carvana has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering (IPO). The company expects to price its 15 million shares in the range of $14 to $16, with an overallotment option for an additional 2.25 million shares. At the maximum price the entire offering is valued up to $276 million. Carvana intends to list its shares on the New York Stock Exchange under the symbol CVNA.
The underwriters for the offering are Wells Fargo, Merrill Lynch, Citigroup, Deutsche Bank, Baird, William Blair, BMO Capital Markets and JMP Securities.
This company is a leading e-commerce platform for buying used cars. It is transforming the used car buying experience by giving consumers what they want – a wide selection, great value and quality, transparent pricing and a simple, no pressure transaction. Each element of its business, from inventory procurement to fulfillment and overall ease of the online transaction, has been built for this singular purpose.
On Carvana’s platform, consumers can research and identify a vehicle, inspect it using its proprietary 360-degree vehicle imaging technology, obtain financing and warranty coverage, purchase the vehicle and schedule delivery or pickup, all from their desktop or mobile devices. Its transaction technologies and online platform transform a traditionally time-consuming process by allowing customers to secure financing, complete a purchase and schedule delivery online in as little as 10 minutes.
The firm uses proprietary algorithms to optimize its nationally pooled inventory of over 7,300 vehicles, inspect and recondition vehicles based on its “Carvana Certified” 150-point inspection process and operate its own logistics network to deliver cars directly to customers as soon as the next day. Customers in certain markets also have the option to pick up their vehicle at one of its proprietary vending machines, which provides an exciting pickup experience for the customer while decreasing variable costs, increasing scalability and building brand awareness.
In the filing, the company described its finances as follows:
Our revenues have grown from $4.6 million in 2013 and $41.7 million in 2014 to $130.4 million in 2015. For the year ended December 31, 2016, we generated $365.1 million in revenue, representing a 180.0% increase over the $130.4 million in revenue that we generated for the year ended December 31, 2015. We continue to invest heavily in growth and generated a net loss of $93.1 million for the year ended December 31, 2016, compared to a net loss of $36.8 million for the year ended December 31, 2015.
Carvana intends to use the net proceeds from the offering to repay its indebtedness and purchase newly issued LLC units. The remainder will be used for working capital and general corporate purposes.