London-based online fashion e-commerce site Farfetch upped the size of its NYSE IPO by as much as 32% early Wednesday, lifting the size of the deal to as much as US$840m.
Amid heavy oversubscription levels, the company increased the marketing range to US$17-$19 from US$15-$17 and the number of shares it is planning to sell to 44.24m shares from 37.5m when the IPO was launched on September 5.
The deal now comprises 33.6m primary shares and 10.6m from selling shareholders that include Advent Venture Partners, Vitruvian Partners and DST Global.
Though several other large IPOs this week have accelerated pricing (Elanco Animal Health, Eventbrite), Farfetch is still scheduled to price Thursday night as planned, according to underwriters.
The 10-year-old e-commerce platform and technology platform for the global luxury fashion industry has more than 2.3m consumers in 190 countries and is on track to cross US$1bn of gross merchant value transacted on its platform this year.
Farfetch typically takes about 30% of the revenue (the take-rate) from third parties that use its platform to sell designer clothes, shoes, bags and jewelry.
In the six months ended June 30, Farfetch grew revenues by 55% to US$267.5m but reported net cash outflows of US$106m.
Goldman Sachs, JP Morgan, Allen & Co, UBS, Credit Suisse, Deutsche Bank and Wells Fargo are leading the underwriting syndicate.
One hedge fund manager said he believed Farfetch should trade in the aftermarket to about US$20.00 a share, representing roughly 8.5 times 2019 forecast revenues and nearly a two-turn premium to online handcrafts marketplace Etsy.
Shopify, a high-flying e-commerce comp, trades at 11 times its 2019 forecast revenue.
“Can you get to Shopify? I don’t think so,” the hedge fund manager said. “Shopify has much deeper penetration with small business.”
Farfetch is addressing a luxury goods market it estimates will reach US$450bn in the next 10 years.
JD.com, an existing shareholder, has pledged to purchase shares in the IPO to maintain its current stake.