Xoom rides remittance wave to IPO
15 February 2013 | 5334 views | 0
Early investors in PayPal are set for another windfall following the IPO of Internet remittance company Xoom.
Co-founded in 2001 by former PayPal investor Kevin Hartz, San Francisco-based Xoom has set the offer price for today's scheduled public flotation of 4.6 million shares at $16 per share, valuing the company at $500 million. Alongside Hartz, other former PayPal luminaries in the Xoom boardroom include Keith Rabois and Roelof Botha.
Targetting the US immigrant market, Xoom allows mobile and Web-based cash transfer to 30 countries using funds sourced from a bank account, credit card or PayPal account. Its revenue grew 68% in the first nine months of 2012, to $57.8 million, and it estimates revenue to be in the range of $21.9 million to $22.4 million for the three months ended 31 December, 2012. The company has yet to post a profit.
Xoom is looking to raise $100 million from the IPO, with venture capital firms including Sequoia Capital retaining a roughly 18% stake after the offering and other early investors keeping 40%.