Shares of Sequoia-backed startup Unity Software Inc. jumped 44.2 per cent in their debut on the New York Stock Exchange on Friday, signalling sustained demand for new stocks.
The company’s stock opened at US$75 a share, giving the firm a market value of US$19.75-billion.
The Silicon Valley startup on Thursday raised US$1.3-billion in its IPO, after pricing 25 million shares at US$52 apiece, much above its upwardly revised price range of US$44 to US$48 per share.
It is the second US$1-billion-plus U.S. software IPO this week to price above the targeted range after data warehouse company Snowflake Inc. raised more than US$3-billion in the largest U.S. listing so far this year.
Unity’s software platform is widely used by game developers, artists, architects and filmmakers to create, run and monetize interactive 3D content.
“The company’s [IPO] timing is good. Not only have U.S. market indexes returned to records, but one of Unity’s top competitors, Epic Games, is also challenging Apple in court,” said Michael Underhill, chief investment officer for Capital Innovations, which invests in IPOs.
Last year, more than half of the top 1,000 games in Apple’s App Store and Google’s Play Store were built using Unity’s software platform, Mr. Underhill added.
For Unity’s IPO, the lead underwriting banks, Goldman Sachs Group Inc. and Credit Suisse Group, used an online system to take indications of interest from investors, with the aim of getting a more accurate gauge of demand.
Orders for an IPO are typically made over the phone.
Investment firm Sequoia Capital is Unity’s largest shareholder with a 24.1-per-cent stake, while private equity company Silver Lake owns 18.2 per cent, according to a filing.
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