Trainline has confirmed what looks set to be London’s biggest IPO of 2019. The online train and bus ticketing platform is seeking to raise £75 million at a valuation range expected to fall somewhere between £1 billion and £1.5 billion. The £75 million raise target will come from the sale of at least 25% of the company’s issued share capital and if demand is high enough that could then be increased through the release of privately held shares.
The road to a public listing has proven a winding one for Trainline, which was founded by Virgin Trains as far back as 1997. The name ‘Trainline’ provides a clue, but the ticket app wasn’t even originally an online business, selling train tickets over the phone from a call centre. By the year ending February, Trainline processed £3.2 billion in ticket sales on behalf of 220 rail and coach carrier partners operating in 45 different countries.
But it has taken Trainline time and dedication to grow the business to where it is today. Virgin Trains, which by then held Trainline in a consortium with Stagecoach and National Express, sold its start-up on to London buyout company Exponent in 2006 for £163 million. Exponent failed in its 2014 attempts to list Trainline but a year later sold the company on, this time to U.S. private equity firm KKR for £500 million, realising a handsome profit.
Trainline’s recent success in growing to become the world’s only truly international digital rail and bus ticket platform can be traced back to the moment current CEO Clare Gilmartin took the reins in April 2014. The former vice president of eBay Europe’s customer-centric approach has undoubtedly proven a success and with 2.8% of the company’s equity, Gilmartin’s hard work will be rewarded to the tune of up to £43 million, if the IPO hits the top end of its valuation target.
Trainline’s IPO prospectus focuses on the continued potential for significant growth. Across Europe’s 5 largest markets, only 39% of train tickets were purchased online in 2018. The online share of the market was significantly less than that in many other markets in Europe and internationally. There is still plenty of room to grow revenues, which came in at £210 million over the year to February for a net profit of £10.5 million.
It is expected, based on comments previously made by Trainline CFO Sean McCabe, that the cash raised by the IPO will be used by the company to pay off much of its current debt, reducing financing costs.Risk Warning:
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.