Made.com valued at £775m on London debut

The IPO was priced at 200p per share, giving the online furniture retailer a market value of nearly £775.3m

Shares in Made.com Group fell sharply on Wednesday on London debut.

The initial public offering (IPO) was priced at 200p per share, giving the online furniture retailer a market value of nearly £775.3m as conditional trading got underway.

Made.com has sold 50m new shares, raising £100m, while a further 46.9m shares will be sold by existing shareholders.

The firm will use the cash to drive growth across mainland Europe, which contributes to nearly 48% of group sales.

A further 14.5m shares could be made available by selling shareholders as part of the over-allotment option.

However, the stock had fallen to 182.88p by 1215 BST.

Chief executive of the company, Philippe Chainieux, termed the IPO "an exciting milestone" for the company.

Our successful track record in the UK and internationally has been made possible with the foundations that we have built over the last 11 years: a unique combination of a well-recognised brand, a proprietary data-driven platform and a bespoke, vertically integrated supply chain, he said.

A listing in London will enable us to accelerate our growth as we lead the development of the online further and homewares market as it moves online, both in the UK and internationally, he said.

Ning Li and Brent Hoberman, the co-founder of Lastminute.com, founded Made.com in London.

The business has benefitted from a boom in demand during the pandemic as people switched to online shopping during the global health crisis. It has 1.1m active customers in the UK and overseas.

Although sales jumped 30% - reaching £315m last year, it remained loss-making. Made.com is targeting sales of £1.2bn by 2025.

Retail analyst Nick Bubb said: The IPO of the much-vaunted Made.com has been a bit of a flop, with the shares priced at the very bottom of the 200p to 265p range, valuing the business at a mere £775m, in contrast to the initial talk of at least £1bn.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: Made.com aims to capitalise on the accelerated shift to e-commerce and the high demand for high makeovers witnessed over the pandemic. But timing is everything for an IPO, and its arrival comes after two disappointing debuts from Deliveroo and Alphaware IP.

With high street retailers firmly back in business, there is also now greater competition in the furniture space, she said.

She said: However, newly-formed habits of browsing the web for ways to improving our living space are unlikely to unwind. Made.com already seems to have a good record in attracting repeat orders and money raised will be focused on accelerating growth. As the dust settles, this volatile start may smooth out over the weeks to come.