One IPO that saw notable interest was EverQuote (EVER), the operator of the largest online marketplace for insurance in the U.S. Specifically, its 4.69 mln share IPO priced at $18, above the $15-$17 expected price range, generating total gross proceeds of $84.4 mln. Growth oriented investors were likely attracted to the company's solid double digit top-line growth, and its potential to expand its footprint internationally, where it currently has little exposure.
The stock opened at $20.59 for trading this morning on the Nasdaq. The IPO was led by JP Morgan and BofA Merrill Lynch.
With over 10 mln consumer visits per month, EVER operates the largest online marketplace for insurance shopping in the country. Its network includes over 160 insurance carriers, including the 20 largest property and casualty carriers. As of April 30, 2018, its marketplace has converted more than 240 mln visits into over 35 mln auto, home, and life insurance quote requests. The EverQuote platform is free for consumers. Revenue generation comes from sales of consumer referrals to insurance providers.
The company, founded in 2010, secured funding from Link Ventures, Stratim Capital, and Savano Capital. Link Ventures is selling nearly 900K shares in this offering, but, will retain about a 61% stake in the company following the offering.
The EverQuote platform is powered by data science. Its rich data assets and proprietary algorithms efficiently attract consumers, match them with insurance providers and drive its overall business model. These assets include more than 1 bln consumer-submitted data points, derived from over 35 mln quote requests, and 100 bln ad impressions acquired through $410 mln in advertising spend over the seven years ended April 30, 2018. As the data assets grow, its algorithms become more powerful. EVER believes its data science capabilities give it a significant competitive advantage.
Taking a look at the financials, for the three months ended March 31, 2018, revenue increased 28% year/year to $40.7 mln. The growth was driven by strength in its automotive and life insurance marketplace verticals. The increase in revenue from its automotive vertical was mainly due to an increase in revenue per quote request as a result of increased demand for consumer referrals by its insurance providers. And the increase in revenue from its home and life vertical was primarily driven by an increase in the volume of quote requests resulting from increased advertising to attract consumers.
While not yet profitable on an operating basis, it is closing in on break-even as operating loss shrunk to ($1.2) mln from ($1.6) mln. On an Adjusted EBITDA basis, the company is even closer at ($374)K for the period.
The balance sheet is a bit light on cash at $2.6 mln as of March 31, 2018. But, the IPO proceeds will give that a boost. It also has some long term debt on the books at $5.8 mln.