Chewy.com (NYSE: CHWY), on Friday, made its debut on the New York Stock Exchange. The Company, which raised USD 1 Billion in its IPO, will enter the market at USD 22 per share. Chewy specializes in the online sale of high-quality pet food and products.
The pet retail sector has become an extremely competitive and crowded space in recent years. Amazon, Inc. (NASDAQ: AMZN) and General Mills, Inc. (NYSE: GIS), which bought pet food company Blue Buffalo in 2018, both pose considerable competition in the industry.
In one of the biggest e-commerce deals in history, PetSmart acquired Chewy for USD 3.35 Billion in May of 2017. PetSmart itself was only valued at USD 8.7 Billion by private equity investors in 2015. This deal even surpasses Walmart’s USD 3.3 Billion acquisition of Jet.com in 2016.
PetSmart acquisition of Chewy could be make or break as the Company invested nearly half of its total market value into the ecommerce brand.
The IPO market has been extremely rewarding for investors recently. Chewy is just the latest of many notable IPO’s in past weeks. Companies such as Beyond Meat (NASDAQ: BYND), Zoom (NASDAQ: ZOOM), and PagerDuty (NYSE: PD), and have experienced stock price surges almost immediately following their IPO. Chewy hopes to follow in the footsteps of these companies.
Chewy’s sales swelled by 68% last year to more than USD 3.5 Billion. This sales growth was a key factor in the Company’s decision to go public. However, despite exploding sales, Chewy is yet to become profitable. The Company reported a net loss of USD 268 Million in 2018. This figure compares to a USD 338 Million loss in the year prior.
Chewy was founded in 2011 by Ryan Cohen and Michael Day who had the goal of providing access to affordable, high-quality pet products. The Company now focuses heavily on promoting animal health and follows that mindset by strictly selling premier quality products. Headquartered in Dania Beach, Florida, Chewy delivers pet products across the country. The convenience of product delivery remains a cornerstone of the business.
Although the Company is not yet profitable, Chewy expects a more than successful IPO on Friday.