Last week, LatAm Autos (ASX:LAA), an Australian founded online auto classifieds startup based in Latin America, announced the opening of its Initial Public Offering (IPO). Today, the company has announced that it has raised AUD$18 million through an oversubscribed IPO, with a market capitalisation of $71.9 million.
The IPO attracted interest from local and international fund managers with demand requiring a scale back of bids. LatAm Autos Non-Executive Directors Michael Fitzpatrick (AFL Chairman) and Simon Clausen (Founding Investor, Feelancer.com) invested a combined $5 million in the IPO to demonstrate their belief in, and commitment to, the business.
LatAm Autos offered 60 million shares at $0.30 a share, and expects the shares to begin trading on the Australian Securities Exchange this Wednesday.
Founded by two Australian entrepreneurs Timothy Handley and Gareth Bannan, LatAm Autos is focused on emerging markets in Latin America – namely, Argentina, Mexico, Ecuador, Peru, Panama and Bolivia – where internet penetration, car ownership and online advertising are all expected to see major growth in the next few years.
According to the prospectus lodged on December 10th, total new and used passenger cars in Latin America have been growing at 7.5 percent compound annual growth rate since 2000. Aggregate sales of new passenger cars in Latin America is three times greater than Australia’s; and online advertising annual growth is between 26 percent and 45 percent in Argentina, Mexico and Peru.
This trend is expected to continue, with online advertising expenditure across Argentina, Ecuador, Mexico and Peru estimated to grow at 22 percent in the coming years to 2018.
The $18 million will be used to fund operational, marketing and technology based initiatives, as well as pay for the acquisition of other Latin American online auto classifieds businesses including: Seminuevos.com and demotores.com.mx, which together are the most visited, dedicated auto classifieds websites in Mexico; Autofoco.com, a top three dedicated auto classified website in Argentina; Patiotuerca.com, which includes the most visited dedicated auto classifieds websites in Ecuador, Panama and Bolivia; and Todoautos.pe, the most visited dedicated automotive content website in Peru.
Referring to local success stories like SEEK, REA and Carsales, Handley said, “Australian investors understand the online classifieds business model very well given their success locally, particularly single vertical focused companies offering a premium product to consumers. Applying this model to emerging markets such as Latin America is a huge opportunity that we are excited to bring to our investors.”