Shopify Inc. jumped in its trading debut, after the company raised a larger than expected $131 million in its initial public offering.
Shopify rose 51 percent to $25.68 in New York Trading, after the shares were sold for $17 each. The stock is also listed in Toronto.
Shopify provides software that helps merchants sell their products online. The company was born out of a conundrum for 34-year-old founder Tobias Lutke, who had snowboards to sell over the Internet in 2004. He said in the prospectus that the software options for setting up small businesses online were complex and expensive, and started Shopify in 2006 as a result.
Today, 165,000 stores use Shopify.
Investors have been clamoring for the shares since Shopify began marketing the IPO: It initially offered the stock at $12 to $14, before boosting that to $14 to $16. The company ended trading Thursday with a market value of about $1.9 billion.
The company doubled revenue to $105 million last year, with almost two-thirds coming from merchants’ subscriptions. The rest is generated through services for the small businesses. Shopify posted a net loss of $22.3 million in 2014.
Among the risks outlined in Shopify’s prospectus, the company cites payments. The company relies solely on Stripe Inc. to process the credit cards through merchants’ sites, and says any disruption could affect revenue. Payments are also subject to changing regulation in the various countries where Shopify operates, according to the prospectus.
Shopify is the first technology IPO to debut in Toronto since DataWind Inc.’s $30.9 million deal June 30. Only 190 IPOs have ever listed in Toronto from the industry, compared with almost 2,000 in New York, according to data compiled by Bloomberg.
Bessemer Ventures, FirstMark Capital, Insight Venture Partners and OMERS Ventures are pre-IPO investors in Shopify. The company will have two classes of stock, with Class B representing 10 votes per share and Class A having one.
Morgan Stanley, Credit Suisse Group AG and Royal Bank of Canada managed the offering. The stock is listed on the New York Stock Exchange under the symbol SHOP and on the Toronto Stock Exchange under the symbol SH.