The greeting card company said it held a 60% market share in the U.K. among online card specialists in 2019 and a 65% share in the Netherlands among the top three digital card players.

(Bloomberg)—Moonpig Group Plc surged as much as 29% in its London trading debut after the online greeting-card company and its shareholders raised 491 million pounds ($672 million) in an initial public offering, tapping investor demand for businesses benefiting from coronavirus-related lockdowns.

Sales at Moonpig more than doubled in the six months ended Oct. 31, according to its registration document, as lockdowns forced many people to forgo in-person celebrations and turn to online deliveries of gifts and cards instead. The company said it held a 60% market share in the U.K. among online card specialists in 2019 and a 65% share in the Netherlands among the top three digital card players.

“It’s remarkable to see a listing by a company that owns this much market share,” said Oliver Brown, a fund manager at RC Brown. “They effectively created the segment.”

The deal comes amid a resurgence in IPO activity in London, with the market off to the strongest start to a year since 2008 after a Brexit agreement cleared uncertainty for domestic firms. Permira Holdings-backed Dr. Martens Plc, whose shareholders raised 1.3 billion pounds in a London listing, surged 22% in its debut session on Friday. Internet IPOs also are in demand around Europe, with online used-car dealer Auto1 Group in the midst of a 1.6 billion-euro ($1.9 billion) offering in Frankfurt.

Moonpig’s sale of 140.3 million shares priced at the top of an initial price range, and values the company at about 1.2 billion pounds, it said in a statement Tuesday. The deal size was increased last week and order books for the initial public offering closed a day early, thanks to strong interest from fund managers.

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The bulk of the proceeds from the sale of the 41% stake in Moonpig will go to selling shareholders including Exponent Private Equity Partners, which bought the company in 2016. The company, which owns the Moonpig brand in the U.K. and Greetz in the Netherlands, raised 20 million pounds in the offering to pay down debt. It expects to be eligible for inclusion in the FTSE U.K. indexes.

Moonpig warned in its registration document that it will face increased competition as brick-and-mortar stores shift to online sales, and that it may not retain its new customers once lockdowns are lifted. The company is counting on its data-driven technology platform to fuel growth. Moonpig’s first-half revenue growth was driven by its mobile app, which saw its share of total orders double to 33% in October from the prior year.

“Moonping could become the go-to online market place for gifting,” Brown said, adding that the company’s growth potential also lies in its plans to make inroads in the U.S. and Australia. Besides, many of the online habits formed amid lockdowns are likely to “stick,” he said.

Moonpig was founded in 2000 by Nick Jenkins, a former commodities trader and star of British TV show “Dragons’ Den,” akin to “Shark Tank” in the U.S. He sold the company to Photobox, an online photo printing and personalized gifts company, in 2011. Moonpig split from Photobox in 2019.

Moonpig is now led by Chief Executive Officer Nickyl Raithatha and Chairwoman Kate Swann, who joined the company in 2019 after making her name as CEO of WH Smith Plc and SSP Group Plc. Raithatha previously worked at Goldman Sachs Group Inc. and German startup factory Rocket Internet SE.

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Two investors, BlackRock Inc. and Dragoneer Global Fund II LP, took up a chunk of the offering, investing 80 million pounds and 50 million pounds, respectively.

Existing shareholders of Moonpig can sell another 14 million shares if there’s enough demand.

Citigroup Inc. and JPMorgan Chase & Co. are joint global coordinators, while HSBC Bank Plc​​​​, Jefferies International Ltd. and Numis Securities Ltd. are joint bookrunners.

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