ETSY on the NASDAQ

Etsy files for an IPO, looks to raise up to $100M

Ten-year-old artisanal e-commerce site Etsy just filed to go public, hoping to raise up to $100 million. Etsy chose the NASDAQ over the NYSE and landed its own name as its stock ticker — ETSY.

According to the filing, the company generated revenue of $195.6 million in 2014, which was 56 percent growth over its revenue in 2013 of $125.02 million. The company isn’t quite breaking even, though it’s come close in the past. Etsy lost $15.2 million in 2014, which was a larger loss than its net loss in 2013 of $0.8 million, and $2.36 million in 2012.

Etsy’s growth has been substantial over the years. In terms of the total amount of sales made through the site, Etsy hit $1.93 billion in 2014 (up 43.3 percent from 2013), and the company claims 54 million members, of which 1.4 million are active sellers and 19.8 million are active buyers.

But Etsy isn’t profitable because it spent significantly more money in 2014 as it ramped up marketing, product development and general administrative spending. In 2014 its total operating expenses were $128.21 million, compared to operating expenses of $76.51 million in 2013, and $51.47 million in 2012. As of December 31, 2014, Etsy had an accumulated deficit of $32.4 million.

Etsy is focused on growth this year and part of its growth strategy is expanding into international markets, says the company in its filing. Another part of its growth strategy is to bring in more buyers to the platform, which it intends to do partly through more marketing. Etsy says much of its current marketing has been through “word-of-mouth referrals and other organic means.”

Etsy had 251 employees at the end of 2011, and 685 employees at the end of 2014. That’s 172.9 percent growth in staff over three years.

Etsy says in the filing that it has enough cash, cash generated from operations, and borrowing capacity to meet its anticipated cash needs for at least the next 12 months. But the company says it may need “additional cash resources” after that. Goldman Sachs, Morgan Stanley and Allen & Company are the bankers in the IPO deal.

If Etsy goes public it will provide a return for its investors. Accel Partners owns 27 percent of shares before the offering and famed venture capitalist Jim Breyer led that investment. Index Ventures owns 12.8 percent before the offering; Union Square Ventures owns 15.2 percent, and well known Fred Wilson led that investment. Etsy CEO Chad Dickerson owns 2.1 percent of the shares.

Etsy has raised close to $100 million in funding. Bloomberg speculates that the company could be valued at $2 billion.

This story is developing and I’ll update as more information comes to light…

One Response to “Etsy files for an IPO, looks to raise up to $100M”

  1. Gnorkel

    Etsy is like Ebay. And they are going in that direction. (Allowing world wide posting for example). I´m not using it. My wife wanted to. Digged a bit into it. But found it

    a) Very expensive
    b) very closed groups (for example no new markets to reach)
    c) The last thing I heard china sellers are flooding the market… good for etsy, good for the IPO. Bad for actual “handmade” sellers.