Stock in Polish e-commerce specialist Allegro shot up nearly 63% during its first day of trading on the Warsaw Stock Exchange last week, giving it a market cap of nearly $19 billion. and pushing it ahead of Commerzbank as the most valuable company traded on the Warsaw Stock Exchange. It had already broken the record for a Polish IPO last month when it raised just over $2.1bn.
Founded more than 20 years ago as a domestic alternative to eBay and Amazon, Allegro had already established itself as central Europe’s most recognised e-commerce brand even before the COVID-19 pandemic struck. Now it is attracting 20 million visitors a month as consumers turn from necessity to the web for their retail therapy and day-to-day shopping needs. “The recent pandemic has highlighted the value of e-commerce and has accelerated e-commerce penetration,” Xtellus CapitaI analyst Ivan Kim told Reuters. “Allegro is a well-established marketplace … and is already quite profitable.”
Allegro CEO Francois Nuyts is equally upbeat. “Today, 12.3 million Poles use our services and 117,000 small and medium-sized companies sell their goods and services through Allegro,” he said. “The potential of the market where we operate is very large and we invest in the development of our platform year after year and we don’t intend to stop. The funds raised through the IPO will provide us with greater financial flexibility.”
Demand for Allegro reflects that of several recent IPOs in the US where shares have shot up as investors demonstrate their willingness to pay for companies with potential for growth. Last month, British e-commerce firm The Hut Group made the biggest debut on the London Stock Exchange in seven years and Allegro’s successful launch is a further sign that the European IPO market is picking up.
According to figures released by EY this week global IPO activity so far this year is also up this year, in this case by 14%. The total number of IPOs currently stands at 872 and, even more impressively, proceeds by 43%.