Online home goods retailer Wayfair valued at $3 billion in debut

Target: Wayfair Inc

IPO Value: $3.06 bln

Sponsors: Great Hill Partners, Battery Ventures, HarbourVest Partners

Underwriters: Goldman Sachs & Co, BofA Merrill Lynch and Citigroup

The company’s debut comes after the blockbuster listing of Chinese e-commerce juggernaut Alibaba Group Holding Ltd in New York and the strong debut of Europe’s largest online fashion retailer Zalando SE in Frankfurt.

Boston-based Wayfair operates websites such as jossandmain.com, dwellstudio.com and birchlane.com, offering more than 7 million products under its own brands.

The U.S. home goods market is expected to grow to $297 billion by 2023 from about $233 billion last year, Wayfair said in a regulatory filing.

Online retailers accounted for about 7 percent of this, the company said.

Wayfair competes mainly with Williams-Sonoma Inc, the operator of potterybarn.com and PBteen.com.

It also competes with brick and mortar retailers such as Bed Bath & Beyond Inc, Lowe’s Cos Inc and Target Corp as well as online sellers including Amazon.com Inc and eBay Inc.

Wayfair’s offering of 11 million class A common shares raised about $319 million. The company sold 10.5 million shares in the offering, which was priced at $29 per share, above the expected range of $25-$28.

Wayfair, previously called CSN Stores LLC, was founded in 2002 as an online seller of furniture. At the time, the company retailed its items through hundreds of product-specific websites including bedroomfurniture.com and allbarstools.com.

In 2011, it consolidated its operations and changed its name.

Private equity firm Great Hill Partners holds a 11.04 percent stake in Wayfair, with private equity firms Battery Ventures and HarbourVest Partners being its other shareholders.

Wayfair’s revenue rose 52 percent to $915.8 million in 2013. The company’s net loss narrowed to $15.5 million from about $21 million a year earlier.

The company’s shares were up 22.9 percent at $35.65 in late morning trading on the New York Stock Exchange. The stock opened at $36 and hit a high of $37.

Goldman Sachs & Co, BofA Merrill Lynch and Citigroup are the lead underwriters for the offering.

Reporting by Amrutha Gayathri for Reuters news service.