(Reuters) - Wayfair Inc's (>> WAYFAIR) shares rose as much as 27 percent in their market debut on Thursday, valuing the online home furnishings retailer at about $3.06 billion.

The company's debut comes after the blockbuster listing of Chinese e-commerce juggernaut Alibaba Group Holding Ltd (>> Alibaba Group Holding Ltd) in New York and the strong debut of Europe's largest online fashion retailer Zalando SE (>> Zalando SE) in Frankfurt.

Boston-based Wayfair operates websites such as jossandmain.com, dwellstudio.com and birchlane.com, offering more than 7 million products under its own brands.

The U.S. home goods market is expected to grow to $297 billion by 2023 from about $233 billion last year, Wayfair said in a regulatory filing.

Online retailers accounted for about 7 percent of this, the company said.

Wayfair competes mainly with Williams-Sonoma Inc (>> Williams-Sonoma, Inc.), the operator of potterybarn.com and PBteen.com.

It also competes with brick and mortar retailers such as Bed Bath & Beyond Inc (>> Bed Bath & Beyond Inc.), Lowe's Cos Inc (>> Lowe's Companies, Inc.) and Target Corp (>> Target Corporation) as well as online sellers including Amazon.com Inc (>> Amazon.com, Inc.) and eBay Inc (>> eBay Inc).

Wayfair's offering of 11 million class A common shares raised about $319 million. The company sold 10.5 million shares in the offering, which was priced at $29 per share, above the expected range of $25-$28.

Wayfair, previously called CSN Stores LLC, was founded in 2002 as an online seller of furniture. At the time, the company retailed its items through hundreds of product-specific websites including bedroomfurniture.com and allbarstools.com.

In 2011, it consolidated its operations and changed its name.

Private equity firm Great Hill Partners holds a 11.04 percent stake in Wayfair, with private equity firms Battery Ventures and HarbourVest Partners being its other shareholders.

Wayfair's revenue rose 52 percent to $915.8 million in 2013. The company's net loss narrowed to $15.5 million from about $21 million a year earlier.

The company's shares were up 22.9 percent at $35.65 in late morning trading on the New York Stock Exchange. The stock opened at $36 and hit a high of $37.

Goldman Sachs & Co, BofA Merrill Lynch and Citigroup are the lead underwriters for the offering.

(Reporting by Amrutha Gayathri in Bangalore; Editing by Kirti Pandey)