Zillow, the online real-estate and home-valuation firm, is the latest to IPO, offered its initial public stock offering at $20 per share.
The Seattle-based company said in a filing with the Securities and Exchange Commission today that it plans to sell nearly 3.5 million shares, raising about $69.2 million. The company also plans a private placement of 275,000 shares to certain existing Zillow investors, raising another $5.5 million and giving the company a total IPO of about $74.7 million and a valuation of about $540 million. It will begin trading Wednesday on the Nasdaq Stock Market under the ticker symbol “Z.”
“This is a much lower-key company than LinkedIn,” said Nitsan Hargil, research director at GreenCrest Capital in New York. “It’s a much smaller company, and I don’t think there is capacity for that sort of frenzy around this name. With the market being as accepting as it is of IPOs, this is a very attractive time to go public.”
Though much smaller than the likes of LinkedIn and HomeAway, Zillow is another example of investors’ thirst for Internet-related IPOs. After setting an initial price range of $12 to $14, Zillow raised that to $16 to $18 last week.
Last April, they filed the initial paperwork towards an IPO, and this month they made the final filing with the Securities and Exchange Commission. In the filing, Zillow has disclosed its 2010 revenues, which have increased by 74 percent to $30.5 million compared to the previous year. It also reduced its net loss, from $12.9 million in 2009 to $6.8 million in 2010. Moreover, in addition to its IPO plans, the company is also set to receive a total of $5.5 million from Technology Crossover Ventures and PAR Investment Partners.
Zillow faces several obstacles, including its low market share and lack of profitability. In a less frenzied environment, Zillow might have delayed an IPO until it had solid earnings but chose to strike when it could.