ZipRecruiter’s stock popped on its first day of trading, opening at $20 on Wednesday after setting a reference price of $18.
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The Santa Monica-based company went public through a direct listing, meaning it didn’t sell a block of shares before it began trading on the public markets. ZipRecruiter, which connects job seekers to employers, reached a valuation of $2.4 billion through its direct listing at its reference price.
“(We’re) confident in the strength of our product, confident in the strength of our brand, and (have) confidence that the macroeconomic background is in our favor,” CEO Ian Siegel said of the company’s decision to go public now in an interview with Crunchbase News.
The COVID-19 pandemic caused mass layoffs and sent unemployment rates skyrocketing. But now that the vaccine rollout has ramped up and cities and states are reopening or preparing to reopen, ZipRecruiter is bracing for high demand for its product. Companies in industries like travel and live events have to staff all the way back up. Those who are still unemployed are seeking jobs, and many people who would’ve changed jobs had there not been a pandemic will be looking for their next opportunity, Siegel said.
ZipRecruiter, which was founded in 2010, also was impacted by the COVID-19 pandemic, with its revenue falling 3 percent from $429.6 million in 2019 to $418.1 million in 2020. Prior to the pandemic, its revenue had grown 18 percent year over year from 2018 to 2019, according to the company’s S-1. IVP is ZipRecruiter’s largest shareholder.
The company opted for a direct listing over a traditional IPO because it didn’t need to raise money, Siegel said. ZipRecruiter is profitable and “we have more cash in the bank right now than we’ve ever raised in primary capital in our company’s history,” he said.
“It was a strategic choice, it wasn’t a fundraising choice,” Siegel said.
There’s going to be even more of a need for ZipRecruiter in the coming months as more businesses open back up, he added.
“We have a material role to play in the reopening of the economy in America,” Siegel said. “And we’re aware of that position; our product does one really fundamental thing, which is to connect people to their next opportunity.”
ZipRecruiter’s stock closed at $21.10 on Wednesday.
Illustration: Li-Anne Dias
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