SAN FRANCISCO (Reuters) - CarGurus, a popular website where consumers go to browse cars, has tapped investment banks for an initial public offering later this year, according to people familiar with the matter.
The Cambridge, Massachusetts-based company is aiming to go public in the fourth quarter of the year at a valuation of more than $1 billion, the people said on Tuesday.
CarGurus has hired bookrunners to lead the IPO, said the people, who asked not to be identified because the matter is confidential. The timing of the IPO could still change, they added.
Online news provider Axios, which first reported on the IPO plans earlier on Tuesday, said the company hired Goldman Sachs (GS.N) and Allen & Co to lead the offering.
CarGurus and Allen & Co could not be reached for comment. Goldman Sachs declined to comment.
Allen & Co investment banker Ian Smith sits on CarGurus' board, according to its website.CarGurus joins a growing list of private tech companies looking to go public this year following the IPO of messaging app Snapchat's owner, Snap Inc (SNAP.N). Enterprise software firms MuleSoft Inc (MULE.N) and Alteryx Inc ALYX.N have also made successful offerings in the past few weeks.
The move comes as more consumers grow comfortable with online used-car purchases. Shares of one of CarGurus' competitors, TrueCar Inc (TRUE.O), a car-shopping service that went public in 2014, have surged 184 percent in the last 12 months.
Earlier this month, Reuters reported that Carvana LLC, which allows customers to pick up cars they buy on the internet from vending machine-like towers, has tapped investment banks for an initial public offering.
Langley Steinert, who co-founded travel reviews website TripAdvisor, started CarGurus in 2006 with about $5 million in funding from individual investors. While it is mostly focused on the United States and Canada, it has started a push to expand into Europe.
The company makes money from the network of car dealers who pay to post their inventory on the website.
Demand for cars, sport utility vehicles and pickup trucks has remained robust among U.S. consumers, even as it dipped slightly in February to an annualized pace of 17.6 million vehicles, compared with 17.7 million a year earlier, according to Autodata Corp.
Reporting by Liana B. Baker in San Francisco; Editing by Matthew Lewis