Carvana Files $100 Million IPO

Carvana, the online used-car marketplace, filed an initial public offering worth $100 million Friday.

The company, which launched in 2012, generated $541.8 in revenue — a 180% year-over-year growth — and sold 27,500 vehicles to customers through its website, according to a form S-1 filed with the Securities and Exchange Commission.

Carvana also experienced $152.6 in total losses in the three-year span from 2013 to 2016 yearend. “We incurred net losses of $15.2 million, $36.8 million, and $93.1 million, respectively, in the years ended Dec. 31, 2014, Dec. 31, 2015, and Dec. 31, 2016,” the company detailed in the filing. “We expect to make significant investments to further develop and expand our business, and these investments may not result in increased revenue or growth on a timely basis or at all.”

There are “significant legal, accounting, and other expenses” Carvana will incur, as a public company, versus private, which may impede future growth.

“We expect that, in the future, even if our revenue increases, our rate of growth may decline. In any event, we will not be able to grow as fast or at all if we do not:

• increase the number of unique visitors to our website and the number of customers;
• further improve the quality of our product offering, features and complementary products and services, and introduce high quality new products, services, and features;
• introduce additional third-party products and services; or
• acquire sufficient appropriate inventory at an attractive cost and high quality to meet the increasing demand for our vehicles.”

Carvana also wrote that there are no assurances it can meet those objectives, but will expend “substantial financial and other resources” on its marketing and advertising; expansion of vehicle inventory; and general administration, legal, accounting, and other compliance expenses related to being a public company.

Ally agreed to fund $600 million worth of contracts for the online retailer in early January, to expand Carvana’s ability to provide financing and its origination growth, the company said at the time.