ChannelAdvisor shares soared more than 40 percent in their market debut on Thursday as investors bet the e-commerce software company will benefit from the rapid global spread of online buying and selling.
The company’s shares opened up 25 percent, after its initial public offering of 5.8 million shares was priced at $14 per share, the high end of its pricing range.
ChannelAdvisor shares were trading up 40 percent at $19.54 on the New York Stock Exchange. They touched an intraday high of $19.73, valuing the company at about $400 million.
Other IPOs on Thursday did not perform as well. Global Brass and Copper and Ply Gem Holdings rose less than 20 percent and Constellium declined 5.5 percent.
ChannelAdvisor, founded in 2001, helps companies sell via online marketplaces and websites such as Amazon.com, Google (GOOG) and eBay (EBAY). Customers include Ann Taylor, eBags.com, J&R Electronics and Jos. A. Bank Clothiers.
E-commerce is growing at about 15 percent a year and Forrester Research estimates that global online consumer spending will top $1 trillion by 2016.
ChannelAdvisor gets fees when its customers generate an agreed-upon volume of sales using its software. When sales exceed those levels, customers pay a little more in what the company calls a “shared-success model.”
“We have about 2,000 customers and handled over $3.5 billion in gross merchandise volume last year,” said Scot Wingo, chief executive of ChannelAdvisor. “That’s really the tip of the iceberg. We have a lot of wood to chop, as these bankers like to say.”
ChannelAdvisor generated a net loss of $4.9 million last year, compared with a loss of $3.9 million in 2011 and $4.7 million in 2010. Revenue rose to $54 million in 2012, up from $44 million in 2011 and $37 million in 2010, according to the company’s SEC filings.
The IPO raised more than $80 million and the Morrisville, North Carolina-based company, whose competitors include Mercent, plans to use the proceeds to expand outside North America and build its sales and marketing capabilities.
North America accounts for most online consumer spending currently, however Forrester expects the region to account for about a third of the global total in the future as other countries grow faster.
“We would love to be a truly global company and be a reflection of the truly global nature of e-commerce,” Wingo said.
ChannelAdvisor does not help companies sell through online marketplaces run by Alibaba, the Chinese e-commerce leader. However, Wingo said that may change.
“So far, we’ve done everything not to sell our software into China,” Wingo said. “But it’s interesting to us. Alibaba is bigger than eBay and Amazon combined.”
Investment firms Kodiak Venture Partners, Advance Technology Ventures and New Enterprise Associates own 47.5 percent of ChannelAdvisor after the offering.
Last week, data analysis software maker Tableau Software saw its shares jump as much as 68 percent in its trading debut on rising interest in big data. Shares of business software companies such as Workday, Guidewire Software and ServiceNow are also trading well above their IPO prices.
Enterprise companies, which sell software and services to businesses rather than individuals, have risen 37 percent, on average, in the two years since their IPOs, compared with 13 percent for consumer companies, according to market data firm Ipreo.
The companies are being buoyed by new technologies like mobile and cloud computing, trends that are creating tremendous business opportunities for young enterprise firms, investors say, leading them to grab market share from incumbents like Oracle (ORCL) and SAP.
One of the biggest reasons for the enthusiasm involves cloud services, which run on off-site, rented computer servers rather than owned hardware on-premise — and the ensuing savings and flexibility.
Goldman Sachs and Stifel Nicolaus are the lead underwriters on the offering.
