SoftBank-Backed Auto1 Plans to Raise $1.2 Billion in Germany IPO

(Bloomberg) -- German online car dealer Auto1 Group GmbH plans to raise about 1 billion euros ($1.2 billion) with a stock market listing in the first quarter of this year, a move that paves the way for its backer, SoftBank Group Corp., to eventually cash in on yet another portfolio company.

“The planned IPO is the next logical step to reinforce Auto1 Group as the go-to online destination for buying and selling used cars in Europe,” chief executive Christian Bertermann said in a statement on Wednesday.

The Berlin-based online used-car platform said that existing shareholders could sell parts of their holding as well in the course of the IPO.

Including the fresh funds, Auto1 could be valued at more than 6 billion euros on the stock market, people familiar with the matter said, declining to be identified because the information is private.

Auto1 said about 750 million euros of fresh funds would be used to expand Auto1’s B2C platform dubbed Autohero.com, under which it sells used cars to retail clients. The company so far mainly buys from retail clients and sells to brick-and-mortar dealers. It didn’t comment on its potential valuation.

The online dealer sold about 650,000 cars in more than 30 European countries and recorded revenues of 3.5 billion euros in 2019. In the third quarter last year, sales rose 90% to 769 million euros and the company reported earnings of 16 million euros before interest, taxes, depreciation and amortization.

Auto1’s IPO pitch is based on the resilience of its business at a time when physical car showrooms are hamstrung by measures to contain the spread of Covid-19, Bloomberg News previously reported. In 2019, the European used-car market amounted to about 600 billion euros, according to OC&C Strategy Consultants.

For Tokyo-based SoftBank, Auto1’s IPO might prove yet another windfall. The firm was valued at about 2.9 billion euros when SoftBank’s Vision Fund invested in 2018.

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