2019 has seen a round of hugely successful tech IPOs, from last week’s surge by business messaging app Slack to food tech star Beyond Meat’s record breaking 600%+ gains since debuting in early May. Video conferencing software company Zoom has also seen its share price treble post-IPO and Pinterest is up around 50%. The only real tech IPO flops of the year have been ride-hailing app companies Lyft and Uber. Now London has its own success story after ticketing platform Trainline recorded a 17% uplift over its first day of trading on Friday.
The company has now passed a market capitalisation of £2 billion, propelling its value beyond that of some of the major rail and transport groups whose tickets it sells. Trainline is now worth more than Stagecoach and First Group combined after its share price closed the week at 411p from a starting point of 350p. The company’s value is further sign of the market’s enthusiasm for dominant online platforms.
While IPO investors will be delighted at Trainline’s strong start to life as a public company, the biggest beneficiaries are the company’s private equity owners KKR, as well as key employees. KKR, the U.S. buy-out specialist acquired Trainline for £450 million in 2015 and has earned £685 million from the IPO while still retaining a third of its shares. CEO Claire Gilmartin, who joined Trainline in 2014 from her previous role as head of eBay Europe has earned £15.8 million from the listing. She still owns shares worth another £35 million. Altogether, the company’s employees have sold stock worth £27 million through the IPO.
Ms Gilmartin’s 5 years of leadership saw Trainline successfully expand out of the UK into international markets. The platform now processes ticket bookings from 45 countries worth £3.2 billion a year. That resulted in revenues of £210 million for an underlying profit of £52.6 million over the fiscal year that concluded in February.
High debt levels did, however, mean a £13.7 million pre-tax loss. IPO proceeds will be used to pay that debt down which should allow Trainline to move into profit, having recorded a pre-tax loss in each of the years since the KKR acquisition in 2015.