Zalando SE priced its initial public offering near the top end of its range, valuing Europe’s largest online fashion retailer at as much as 5.35 billion euros ($6.8 billion), kicking off the biggest week in German technology stock sales in a decade.
The shares were priced at 21.50 euros a piece, raising 605 million euros by selling as much as 11.3 percent of share capital, the company said in a statement late yesterday. The IPO is one of Germany’s most significant e-commerce IPOs to date.
Zalando’s start of trading Oct. 1 and the Frankfurt debut of Rocket Internet (RKET) the following day marks a coming of age for Europe’s startup industry and a coup for the Samwer brothers, the Berlin entrepreneurs who control e-commerce holding company Rocket. Zalando, started by the Samwers in 2008, is a product of the Rocket startup mill.
Demand for e-commerce stocks is heating up after Alibaba Group Holding Ltd. (BABA) rose 38 percent in its trading debut this month in the biggest initial public offering of all time. The company overtook Amazon.com Inc. (AMZN) as the world’s largest online retailer by market capitalization.
Zalando had marketed the shares at a range of 18.00 euros to 22.50 euros a share.
Oliver Samwer, Rocket’s chief executive officer who still owns part of Zalando, has said he’s trying to build Rocket into the world’s Internet powerhouse outside the U.S. and China. The IPOs could also spark demand for offerings among other European tech companies, some of which have been languishing in a difficult IPO landscape for years.
Investors in Zalando include Sweden’s Investment AB Kinnevik (KINVB), the Samwer brothers’ Global Founders fund and billionaires Anders Holch Povlsen of Denmark and Yuri Milner of Russia. The company posted profit before interest and taxes of 31.5 million euros in the second quarter on sales of 546 million euros. Zalando had 2 billion euros in sales for the 12 months ended in June. The company gets more than half its revenue from Germany, Austria and Switzerland.
Rocket, which replicates businesses from Groupon Inc. (GRPN) to Airbnb Inc., increased the amount it’s seeking to raise in its IPO to 1.4 billion euros, a figure that would make it the biggest share sale in Germany this year. The company has enough demand to sell the shares at the top end of an offered price range of 35.50 euros to 42.50 euros, according to terms of the deal seen by Bloomberg News.