Set to open at $24 on June 15, Avalara’s stock price has soared 50 percent within the day and the tax automation company’s IPO has brought in almost $285 million.
Avalara’s mission is to be a part of every internet transaction in the world, but CEO Scott McFarlane said Friday that the company still only had 4 percent market penetration, with plenty of room to grow. Following this successful offering, he said the company will continue to do what it’s doing, “building out content, getting more partnerships in the marketplace, looking for opportunities in order to build out adjacent products just like it’s done in the past with exemption certificates, returns and the like.”
Avalara CEO Scott McFarlane and others watch the stock price from the NYSE floor.
The stock offering will close on June 19, but analysts at Marketwatch are already calling it overpriced. Because of operating costs, Avalara’s net income went from -$54 million in 2016 to -$64 million last year. However, the company just opened a brand new headquarters building in Seattle and is anticipating a boost to business after the Supreme Court’s Wayfair vs. South Dakota decision, expected imminently. The case deals with the responsibility of online sellers to collect and remit taxes in states in which it sells, despite having no physical location there. This is expected to open the market wide for sales tax automation providers like Avalara.
“Listing on the New York Stock Exchange is an honor and a humbling experience,” said McFarlane, who currently holds approximately $85 million worth of shares in the company, in a statement. “I am proud of Avalarians past and present who made this possible, and we do not pretend that we could have done this without the trust and commitment of our customers and partners. The nexus of tax and technology is certainly in the limelight right now, though for Avalara it has always been exciting. For us, tax technology is thrilling and fun, but we understand this perspective may not be shared by everyone who has tried to manage taxes. Avalara offers businesses of all sizes the solutions that can alleviate the burden of tax compliance; a weight that becomes heavier each week as compliance complexity increases around the world. Both as a company and as part of our partner network, we remain committed to helping companies overcome any challenge that may stand in the way of tax compliance done right.”
As for today, after ringing the opening bell on the NYSE floor, McFarlane said it’s been “hard to take it all in.”
