Xoom’s Value Soars On IPO
Xoom is an online payments company that was planning to raise $100 million from an initial public offering, which would value the company at $500 million. Xoom helps users transfer money internationally through the Internet. The company made their price per share $16. Earlier, the company priced their shares at the $13-$15 range. When the company went public on Friday, the share’s closed at $25.49 on the NASDAQ with the symbol “XOOM.” This is a 59% jump from the $16 offer price.
Xoom was co-founded by Kevin Hartz in 2001. He was an earlier investor in PayPal. Anyone can use Xoom, but it is primarily used by immigrants to send money to 30 countries on 6 continents. Cash is sent through Xoom to a person’s cellphone from a bank account, credit card, or PayPal account. The person that receives the money can withdraw the cash from a bank, store, or home.
Xoom charges customers to transmit money, but it is less than what companies like Western Union charges. Xoom charged around $80 million in revenues last year, but is not profitable yet. Xoom is sold 4.6 million shares in the IPO and other stockholders offered an additional 1 million.
Xoom was backed by venture capital companies Sequoia Capital, New Enterprise Associates, and Agilus Ventures. Barclays PLC and Needham & Co. LLC was the lead underwriters.