Shares of Square, the mobile payments company co-founded and still run by Twitter chief executive Jack Dorsey, soared as much as 64% in their market debut.
This followed a marked-down initial public offering, countering the negative sentiment that has nagged at Silicon Valley startups in recent weeks.
The steeply discounted IPO price, at less than 60% of the company's last private valuation, had raised questions about the prospects of other so-called 'unicorns' - startups worth at least $1 billion - that might want or need to go public.
A number of tech IPOs have performed poorly over the past year, and mutual fund investors including Fidelity Investments have been marking down the value of their private tech holdings.
Dispelling some of the gloom, Square's shares jumped to a high of $14.78 in early trading on Wall Street yesterday and closed at $13.07, booking a 45% gain.
The rise came after the IPO priced at $9, well below the expected range of $11 to $13 and even farther below the $15.46 price of Square's last private financing in 2014.
It bucked a difficult stretch for IPOs, which are trading down about 5% for the year.
Square's strong start was followed by a positive debut by online dating empire Match Group, whose shares finished the day up nearly 23%.
Square raised $243m in its IPO, money the company needs to cover heavy losses. It reported a loss of $131.5m in the first nine months of the year after losing $117m the same time a year ago, though revenue rose 49% to $892.8m.
The debut comes at a time when slowing global growth and uncertainty about the timing of a US interest rate hike have kept investors on edge.
Dorsey owns 21.5% of Square following the IPO and is the company's biggest single shareholder, with a stake now worth almost $930m.
The high-flying executive is also trying to run Twitter, another company with substantial obstacles to growing profits. Shareholders in both companies have been concerned about Dorsey's dual role.
Square's chief financial officer Sarah Friar said in an interview with Reuters that the company has been investing heavily in new hardware, such as chip-enabled card readers, and building out its lending business, Square Capital.
"The slope of the line is up and to the right in terms of our operating margin," she said. "So we are going to grow but we are going to do it in a disciplined way."
Friar pointed to the consumer trend of shopping less with cash. "Still, 40% of all commerce is done with cash and check, but slowly that’s eroding. So that’s one big reason for the growth," she said.
Square, founded in 2009, has built a substantial customer base with a credit card reader that can turn a mobile device into a payment terminal.
It has made its mission to enable any small business to easily accept any form of payment, and also provide them with additional services ranging from lending to payroll management.
But the company faces intense competition in the payments market, with Apple launching its Apple Pay service, Amazon exploring in-store payments, and startups such as Stripe entering the fray.
Meanwhile big banks and card processors continue to dominate the payment business, and Square has to pay out most of its gross revenues to banks and credit card networks.
