CARY, N.C. -

ACV Auctions is now a publicly traded company.

The online wholesale auto marketplace launched its initial public offering Wednesday on Nasdaq, with chief executive officer George Chamoun ringing the opening bell.

Auto Remarketing caught up with Chamoun on Wednesday afternoon to talk about the IPO and what ACV has planned next.

“When I was looking around the room, all of my partners and teammates all had these really big smiles,” he said of the opening bell ceremony. “And what was going through my mind is just, 'This is going to be really a massive momentum moment.'

“We've done amazing things,” Chamoun added. “We're still young. But this is a rather big moment for the company. And when you think about going forward, I look at today as momentum in so many ways: Momentum in having capital to grow, momentum in being able to hire additional, really unbelievable teammates, (and) momentum for my current teammates.”

ACV said Tuesday that it priced its 16.55 million Class A common stock shares in the offering at $25 per share. The shares opened trading Wednesday on Nasdaq at $32/share, reaching a high of $34.50, a low of $29 and closing the day at $31.25.

That's up 25%, or 6.25 points, from the prior close of $25.

The offering is expected to close Friday.

Opportunities ahead

When asked what opportunities may come from the IPO and some of the next steps, Chamoun boiled it down to three areas.

First is increasing employee headcount to drive geographic expansion.

"One is additional expansion of our territories and hiring inspector teammates across the country. So that's just increasing our expansion here in the U.S. from 125 territories to 160 plus, hiring more and more inspectors across the country so we can get to every dealership and any consumer's driveway on behalf of our dealer and commercial partners,” Chamoun said.

Next on the list is further expanding ACV’s product, technology and R&D.

Chamoun points to the S-1 filed with the Securities and Exchange Commission and said it indicates, “we're increasing our spend by 150%.”

He added: “We've already created pretty amazing things for the industry like AMP — Audio Motor Profile — Virtual Lift and extraordinary marketplace capabilities. We'll now have the resources to invent even more."

The third involves the potential expansion of ACV’s capabilities.

In April of last year, ACV purchased ASI, which was previously part of SGS Transportation Services in the U.S. ASI provides a variety of inspection services to the auto industry — including off-lease, which was said at the time of the purchase would be a major piece of its work with ACV.

That 2020 purchase followed ACV acquisition of TrueFrame in December 2019, a move that added retail inspections to ACV’s offerings. TrueFrame provides True360 vehicle inspections, which aim to provide dealers and consumers more context when they’re buying used vehicles

With the IPO, ACV has “both cash and stock currency” to continue broadening its capabilities, Chamoun said.

 ACV can now, “Expand what we're doing even more; we've got the cash, we've got the currency to add to our capabilities,” he said.

In the “Use of Proceeds” section of its S-1/A filed with the SEC, ACV said: “The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our Class A common stock and facilitate our future access to the capital markets. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds we receive from this offering.

“However, we currently intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures,” the company said. “We may also use a portion of the net proceeds we receive from this offering to acquire complementary businesses, products, services or technologies. However, we do not have agreements or commitments to enter into any material acquisitions at this time.

“We will have broad discretion over how to use the net proceeds we receive from this offering. We intend to invest the net proceeds we receive from this offering that are not used as described above in investment-grade, interest-bearing instruments.”

Public markets add used-car players

ACV is at least the fourth company in the used-car space to go public in the past year. Online auto retailer Vroom went public through an IPO in June, while rival Shift and retail remarketing platform CarLotz subsequently went public through respective mergers with special purpose acquisition companies.

So, what does this kind of activity tell Chamoun about the used-car space?

“I think it's massive," Chamoun said. "When you look across other industries, other sectors, we're in one of the largest sectors, one of the largest market opportunities. 

“Consumers are buying 40 million cars a year, whether buying it from a dealer or another consumer,” he said. “And then wholesale in and of itself is a massive opportunity. So, when you look at how we fit into that ecosystem … we're here to help dealers compete in the digital world, with our auctions product, helping them buy and sell in wholesale. And True360, helping them retail, helping them promote their ecommerce business. 

“The dealers continue to shift to digital. We're here to help them. And the industry's massive. So, I think you're just seeing (that) partially that's reflective of how big this industry is.”