After merging with a blank-check company, Porch.com is now a billion-dollar company.
Despite recurring losses — which prompted accountants to raise red flags in the company’s IPO filing — the home-services startup made its stock market debut on Nasdaq today, with shares opening at $15.37.
Even before the opening bell, Porch’s valuation soared to more than double its enterprise value of $523 million in July, when it struck a deal to go public.
The company’s merger with PropTech Acquisition Corp. closed on Wednesday. The special-purpose acquisition company was formed last year by Thomas Hennessy and Joseph Beck, former Abu Dhabi Investment Authority execs. After trading around $10 per share for several months, the SPAC’s stock jumped nearly 25 percent after shareholders approved the Porch merger on Dec. 21.
Based on Porch’s opening stock price, Ehlichman’s 24.8 percent stake is now worth $266.4 million on paper. Hennessey and Beck each hold a 6 percent stake worth $64.4 million.
Prior to the IPO, Porch had raised $120 million from investors including Valor Equity Partners, Lowe’s Cos., Founders Fund and Battery Ventures.
In the company’s IPO filing, it said it generated $77.6 million in 2019, up from $54.1 million a year prior. But its losses also widened, to $103 million in 2019 from $49.9 million in 2018. The company’s recurring losses raised red flags for accountants, who expressed “substantial doubt” about its viability.
But in an October interview, Ehrlichman said the IPO would give it a clean slate, and that the company became profitable in June of this year. Porch hopes to generate up to $500 million in revenue in five to seven years by growing its core business.
The company said it received $322 million in gross proceeds from the IPO, including a $150 million investment led by Wellington Management. Other investors include Scopus Asset Management and Steve Cohen’s Point72 Asset Management, which acquired a 6.4 percent stake that’s now valued at $17 million.