Updated: Etsy, the “eBay for crafts,” has raised a new $20-million round of financing — its fifth — according to several reports, as sales at the user-generated site continue to grow rapidly. The funding is from a group of venture capital funds led by Index Ventures, and Index partner Danny Rimer has joined the craft-seller’s board of directors. Also participating in the round were previous investors Accel Partners (Jim Breyer of Accel is also on the Etsy board) and German media group Hubert Burda Media. Past rounds of financing have included Union Square Ventures.
Etsy’s last round of $27 million was raised in 2008 and valued the company at about $100 million. The latest round values the company at about $300 million (it’s raised a total of more than $50 million in its five financing rounds). Update: Fred Wilson of Union Square Ventures, who sits on the company’s board, says that the latest transaction was designed to provide liquidity for some of the early angel investors, rather than as a way for Etsy’s founders or larger venture funds to take money out of the company.
Former Google executive Adam Freed has also joined the company as chief operating officer, according to a report at All Things Digital. Rob Kalin, who co-founded the company in 2005, recently returned as CEO and replaced former NPR executive Maria Thomas. Etsy has annual revenues of between $15 million and $20 million, according to a recent interview with the founder by the Wall Street Journal earlier, and the amount spent by users of the site was up by over 70 percent earlier this year.
Some of the money raised in its latest round will likely be spent on upgrading the site’s infrastructure and customer support; Kalin told the WSJ that the company was looking to double the number of customer support staff in order to deal with complaints about the length of time it took for users to reach a support person, and that the company also wants to improve checkout speed at the site by upgrading its software and adding more servers. Kalin also said the company plans to do an initial public offering at some point in the future, but likely not until next year.
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