LegalZoom shares jump 35% in market debut; CEO sees further opportunity in online legal services
LegalZoom made its market debut Wednesday, with shares opening 31% above their offer price in the company’s second attempt at going public.
The online legal platform was valued at over $7.5 billion as shares soared as much as 38%. The stock closed up 35.18% at $37.85 per share, putting LegalZoom’s market capitalization at $7.35 billion.
The stock opened at $36.75 per share after an initial public offering price of $28 each. The firm sold about 19.1 million shares at that price Tuesday night, raising about $700 million.
LegalZoom provides legal and compliance solutions and operates across all 50 states and more than 3,000 counties in the U.S.
“I’ll just start by saying, you know, our mission is to democratize law,” LegalZoom CEO Dan Wernikoff told CNBC on Wednesday. “The market itself is extremely large” for legal services, around $50 billion, he said.
“When you think about legal services, 8% of our services are delivered online versus other categories, like accounting, where you see much more adoption of online solutions,” he said. “That’s the opportunity that’s in front of us and when we get really excited.”
The firm had previously filed for a stock market listing in 2012, but withdrew it in January 2014. Four years later, LegalZoom was valued at $2 billion after Francisco Partners and GPI Capital made a $500 million investment in the firm.
In a “TechCheck” interview, Wernikoff said the company tries to meet customer needs in a cost-effective way, especially for small businesses.
“Today you only have a couple options. You either have a very low-cost solution which doesn’t provide any guidance, or you have to … pay for an expert and you’re worried about the time you’re spending with the expert,” Wernikoff said. “We try to get right in the middle of those two opportunities and use technology really to make the expert that much more efficient.”
LegalZoom just one of many companies making their public debuts Wednesday, including Chinese ride-sharing company Didi, biometrics screening company Clear, digital ad firm Taboola and cybersecurity firm SentinelOne.
— Reuters contributed to this report.
