NEW YORK (Reuters) - Chewy Inc said on Thursday it priced its initial public offering at $22 per share, above its target, and sold more stock than originally planned, valuing the online pet products retailer at $8.77 billion.

FILE PHOTO: The Petsmart store in Westminster, Colorado is seen November 18, 2014. REUTERS/Rick Wilking/File Photo

The IPO raises funds to help manage the debt load of parent company PetSmart, and indicates investor demand for a loss-making but fast-growing e-commerce company to tap into the roughly $70 billion U.S. pet industry market.

Chewy’s sales have rocketed from $26 million to $3.5 billion between 2012 and 2018. Its 2018 net loss narrowed to $267.9 million from $338.1 million in 2017.

Some 46.5 million Chewy shares were sold in the IPO, up from the anticipated 41.6 million as PetSmart sold more shares than originally planned.

At $22 per share, PetSmart will receive almost $900 million from the sale of its stock. Chewy raised $123.2 million, which the company has said will be used for working capital and other expenses.

Chewy had set a price range of $19 to $21 per share, which was raised earlier this week from $17 to $19 per share.

Chewy pitched its stock to investors as a way to buy into the trend of “pet humanization” by owners who are increasingly treating pets as a part of their families, as well as buying into an industry which has historically held up well in economic downturns.

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Private equity firm BC Partners Inc acquired PetSmart for $8.7 billion in 2014, as it sought to capitalize on consumers lavishing their pets with expensive treats and gear.

However, the company quickly faced strong headwinds as many customers snubbed its stores for the convenience of online shopping.

In response, PetSmart acquired Chewy in 2017, adding $2 billion to PetSmart’s debt load to do the deal. The IPO values Chewy at almost three times the $3.35 billion PetSmart paid for the company.

Chewy competes with Amazon.com Inc and Blue Buffalo Pet Products, which was acquired by General Mills Inc last year.

Chewy is trying to foster customer loyalty, an effort which has included sending bereavement cards to shoppers who have recently lost a pet.

Chewy co-founder Ryan Cohen sees plenty of growth left for the company and long gone are the company’s early days when it struggled to attract capital.

“There’s still lots of penetration and growth to be had just within the U.S. market, there’s continuing to expand internationally,” Cohen, who stepped down as CEO of Chewy in 2018, said in an interview earlier this week.

After the IPO, PetSmart and BC Partners will retain control of Chewy through their class B shares, which carry considerably more voting power than the class A shares investors in the IPO are buying.

The IPO comes after PetSmart settled a dispute with lenders in April over the transfer of a portion of its stake in Chewy to certain PetSmart subsidiaries.

Shares of Chewy are expected to start trading on the New York Stock Exchange on Friday under the symbol “CHWY”.

Morgan Stanley, JPMorgan, Allen & Co and Bank of America Merrill Lynch are leading the 12-member underwriting team.