Shares in online marketplace Redbubble Ltd (ASX: RBL) climbed 15 cents or around 11% above their initial public offer price to $1.48 this morning after the group started life as a publicly-traded business.

The Redbubble website lets individuals buy personalised apparel, art, stationery or general lifestyle and home décor that is not manufactured on a commercial scale. Especially popular products are personally designed iPhone cases or wallets, which are then showcased on the Redbubble website and available to order.

There’s no need to worry about your fashion credentials too much if you’ve never heard of Redbubble, as it is largely an overseas business. In fact in FY15 93% of its sales were outside Australia, with the US and Europe its two core markets and further geographic expansion part of its growth strategy.

In effect the company acts as a digital middleman between the artists, product manufacturers and shoppers in taking a small service fee for every product sold on the website.

The site’s core metrics have been growing strongly with revenue growth up 71.4% for the first half of FY16 and user growth also helping build a network effect where buyers and sellers are attracted to the website that offers the best products and commercial benefits to its users.

As a digital business it has none of the overheads of a bricks-and-mortar retailer and enjoys global opportunities as anyone able to get online can buy or sell on its marketplace.

The company is losing money though as it invests for growth, with forecasts for a full year loss of $18.46 million in the current financial year and a forecast loss of $6.68 million in FY17.

It has raised nearly $40 million at the IPO stage which will be used to fund increased staff numbers and the investments in technology required if you want to build a globally-leading online marketplace.

At the issue price of $1.33 per share the group trades on 1.22x its forecast FY17 revenue of $172.2 million on an enterprise value basis. This seems reasonable, but the website operator will have to get a wriggle on to meet those forecasts with revenues of just $71 million in FY15.

Tech IPOs have a reputation for hitting frothy valuations before coming back down to earth as financial reality bites. Recent examples of this include XERO FPO NZ (ASX: XRO), Freelancer Ltd (ASX: FLN) and Reffind Ltd (ASX: RFN). It would not be a surprise to see some of the frothiness come out of Redbubble’s valuation in the months ahead either.

Another recent IPO in the tech retailer space is Afterpay Holdings Ltd (ASX: AFY). Its shares also soared above their IPO price on hitting the ASX boards and it remains an exciting prospect if able to deliver on its potential.

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Motley Fool contributor Tom Richardson owns shares of Xero and Reffind.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of Xero. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.