Zoom2u (ASX:Z2U) share price doubles on initial public offering

Shares in the delivery company have soared after it listed on the ASX

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Happy courier driver smiles and waves with a white glove on his hand as he holds a box for delivery with the back of his van in the background.

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The Zoom2u Technologies Ltd (ASX: Z2U) share price has rocketed 100% after the company completed its initial public offering (IPO) on Friday.

Zoom2u shares are now changing hands at 40 cents apiece, after entering the secondary markets at 20 cents.

What is Zoom2u Technologies?

Zoom2u is a delivery service that offers its customers a Software as a Service (SaaS) business model. It has a product that manages bookings, optimises routes, and shares live locations of couriers with customers. It actually operates two businesses, Zoom2u itself and Locate2u.

The company also develops intellectual property in a number of other technology products, through its subsidiaries.

It was founded in 2014 by now CEO Steve Orenstein, who started Zoom2u after selling a previous company "to a NYSE company".

Zoom said its IPO was oversubscribed from new shareholders including institutional, professional, and retail investors.

It successfully raised $8 million at 20 cents per share, with a market capitalisation of $34.7 million at the offer price.

According to the ASX release, the company has "started FY22 strongly, with significant increases in number of customers, drivers, total deliveries, and gross marketplace value (GMV)".

Additionally, it stated the company is "well-positioned to capitalise on favourable tailwinds" in the Australian and global delivery services market.

In terms of operations, the company achieved a compound annual growth rate (CAGR) in revenue of 71% between FY2015 and FY2021.

This positive outlook from the company appears to be driving up the Zoom2u share price.

What did management say?

Speaking on the IPO, Orenstein said:

We've been delighted by the response the IPO has received from institutional, professional and retail investors which led to a significant level of demand, which was validation of the company's performance to date and growth strategy.

Regarding its next moves, Orenstein added:

Zoom2u's vision is to be the future leader in last-mile delivery both in Australia and across the globe. The first two months of FY22 have started strongly with lockdowns in New South Wales and Victoria supporting growth in revenue, deliveries and GMV. We remain confident that the company will continue to drive growth, delivering sustained operational performance for shareholders in FY22 and beyond.

Investors can expect to see more action for the Zoom2u share price in its first full week of trading from next Monday.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson

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