Bill Gates' private investment vehicle is one of the largest shareholders of Vroom, a technology-driven online used car dealer that went public on Tuesday.
Cascade Investment LLC held 7.2% of Vroom prior to the public offering the company's IPO documents.
This is a somewhat surprising investment for Gates, although the Microsoft co-founder owns stakes in transportation companies such as the Canadian National Railway Company and the digital freight startup Convoy in Seattle.
Vroom valued its stock at $ 22 / share to raise approximately $ 470 million and value the 7-year-old company at more than $ 2 billion. The shares more than doubled at 9 a.m. on the first day of trading.
Shares with a Vroom price above the previous range, indicating that the IPO window will also open to the global economy in a fragile time. Marketing software startup ZoomInfo, based in Vancouver, Washington, also outperformed, with shares up 62% on the first day of trading last week.
Vroom, based in New York City, helps consumers buy and sell used cars online, with financing, delivery, and more. Almost 19,000 vehicles were sold last year, compared to 10,006 in 2018. The number of vehicles on its platform increased from 2,963 to 5,107 in the first quarter, while the average number of monthly visitors more than doubled.
Vroom had sales of $ 1.2 billion in 2019, almost 40 percent more than the previous year, with a net loss of $ 143 million. The company took around a third of its workforce leave due to COVID-19 disorders last month, but said it had brought back 60% of these employees.
The company estimates that there is only 0.9% e-commerce penetration in a used car market in the United States that posted sales of $ 841 billion last year.
Paul Hennessy, CEO of Vroom, said the business has seen positive momentum in recent months. He noted concern about the return to local transportation and the lack of contact in the Vroom buying process. He cited data showing that customers are now twice as likely to buy a used vehicle online.
"We believe that the market is really coming and that it creates the tailwind," Hennessy told CNBC on Tuesday.