NEW YORK, April 1 — GoDaddy Inc gained in its trading debut, after the company raised US$460 million (RM1.7 billion) in a larger than expected initial public offering.

Shares of the 18-year-old company, which provides domain-name registration and hosting services, rose 31 per cent to US$26.15 as of 10:08am in New York. GoDaddy sold 23 million shares for US$20 each, after offering 22 million for up to US$19.

At the IPO price GoDaddy has a market value of just over US$3 billion.

GoDaddy’s pitch to investors is that its customer base of small businesses seeking new Websites will keep growing. Revenue grew 23 per cent in 2014, which was faster than rivals Endurance International Group Holdings Inc and Germany’s United Internet AG.

“Most small businesses have fewer than five employees, and most small-business owners identify themselves as having little to no technology skills,” the company said in its IPO filing. “Our addressable market extends beyond small businesses and includes individuals and organisations, such as universities, charities and hobbyists.”

GoDaddy is backed by private-equity firms Silver Lake Management and KKR & Co., which acquired a majority stake in 2011. GoDaddy plans to use the proceeds to make a payment to the buyout firms and repay debt.

Super Bowl

The Scottsdale, Arizona-based company was founded in 1997 by Bob Parsons and raised its profile through Super Bowl commercials it started showing eight years later. The company’s advertising campaigns have featured celebrities including race- car driver Danica Patrick and Israeli model Bar Refaeli.

Some of those campaigns have been criticised by women’s advocates as being tasteless. The company says that marketing has helped increase name recognition among consumers and will continue.

“We have invested, and expect to continue to invest, substantial resources to increase our brand awareness,” the company said in its IPO prospectus.

GoDaddy has almost 13 million customers, the document shows, and generates revenue from subscriptions of domain and hosting products. Sales jumped 23 per cent last year to US$1.39 billion. The net loss was US$143 million in 2014.

At its US$3 billion valuation, GoDaddy is trading at around 2.2 times those sales. Endurance trades at about four times sales, while United Internet is fetching closer to three times, data compiled by Bloomberg show.

Growth opportunities

GoDaddy, which still primarily helps small companies get domain names, has been investing in other lines such as hosting customers’ sites. The company had about 13 million customers at the end of last year, up from 8 million at the end of 2010, the filing said.

Opportunities continue to grow, GoDaddy said in the filing. More than 50 per cent of small businesses in the US didn’t have websites as of early 2013, according to a study by Beall Research that was commissioned by GoDaddy. — Bloomberg