U2 singer Bono is set for yet another windfall as a second major investment in a technology firm pays off.
Bono is expected to make an estimated $250 million on his $100 million investment in Yelp, which was made via his private equity group Elevation Partners.
Yelp, a website that lets users review everything from diners to dentists, raised $107.3 million in its initial public offering, pricing the shares above the marketed price range.
The San Francisco-based company sold 7.15 million shares for $15 each, according to a statement yesterday, after offering them for $12 to $14 apiece. The offering values Yelp at $900 million.
Yelp shares surged on their debut appearance on the New York Stock Exchange today, opening at $22.01 and traded as high as $26, up 73.3 per cent.
Yelp faces stiff competition for local ad revenue from larger rivals Google and Facebook, which filed for the biggest internet IPO on record last month. Elevation Partners paid $120 million for a chunk of Facebook’s shares in 2010 and that investment is set to be worth about $1 billion following the company's public flotation.
Yelp, led by chief executive Jeremy Stoppelman, plans to start hiring an international sales force this year to begin offering ads in overseas markets, according to a regulatory filing.
Goldman Sachs Group, Citigroup and Jefferies Group led the latest offering.
Yelp's biggest investors, including Mr Stoppelman, didn't sell shares in the IPO.
The former PayPal executive will hold about 11 per cent of the voting power in Yelp following the share sale, according to a regulatory filing. Bessemer Venture Partners and Elevation Partners each will have about 22 per cent, the filing shows.
Revenue at Yelp rose 74 per cent to $83.3 million last year, with local ads accounting for 70 per cent of that and brand advertising making up most of the rest.
The company hasn't posted a profit since at least 2007, according to the prospectus.
Yelp planned to sell 7.1 million shares, while the Yelp Foundation, the company's non-profit organisation, planned to sell 50,000 shares, according to the original terms of the offering.
Additional reporting: Bloomberg