Auto-buying website TrueCar Inc. rose in its trading debut after it raised $70 million in an initial public offering.
TrueCar gained 12% to $10.06 at the close of trading Friday. The Santa Monica company, which provides pricing and vehicle data for consumers and helps car dealers find customers, sold 7.78 million shares Thursday for $9 each, according to data compiled by Bloomberg, after offering them for $12 to $14.
"I'm glad we're out and I think it does underscore that the fundamentals of the business are just really strong," Chief Executive Scott Painter said. Given "choppy"
TrueCar's revenue, which jumped 75% in the first quarter, comes from fees paid by dealers participating in its network, according to its prospectus.
TrueCar has more than 8,000 U.S. auto dealers in its network and is adding more, Painter said.
"We've doubled the size of the dealer network in the last two years," he said. "More importantly, we've taken the total originations for that network up from 4% of the total sales in 2012 to 7.5% in 2013. Now in 2014 we represent, across the entire network of dealers, 15% of all their sales."
Dealers pay the company $300 for each customer it refers who buys a new vehicle and $400 for a used-car sale, according to TrueCar.
At the IPO price TrueCar would have a market value of $639 million, based on 71 million shares outstanding after the offering, according to the original terms of the prospectus.
TrueCar named John Krafcik, the former head of