The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — Etsy Inc., the global marketplace for handmade and vintage goods — from knitted sweaters to soaps — is planning an initial public offering that could take place as soon as this quarter, people with knowledge of the matter said.
The company, based in Brooklyn, New York’s Dumbo neighborhood, is working with Goldman Sachs Group Inc. and Morgan Stanley on the IPO, said the people, who asked not to be identified because the information is private. Etsy may seek to raise about $300 million in the sale, one of the people said.
Rob Kalin, a painter, carpenter and photographer, founded Etsy in 2005 after failing to find a place to sell his hand- built, wooden computers. The company now has about 26 million items listed on its site — from a $529 turquoise 1957 Royal Quiet De Luxe typewriter to a $35 stuffed toy robot.
Etsy charges 20 cents for sellers to list products, and takes a 3.5 percent commission from each item sold. The company also generates revenue from advertising and payment processing. Etsy is likely to release a prospectus for the IPO this month, according to the people familiar with the situation.
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The company is one of several closely held e-commerce startups — including Fab.com and Gilt Groupe Inc. — that have been valued at more than $1 billion. Some have run into hurdles, with Fab.com recently winnowing down operations and Gilt still private after having worked on an IPO last year. E-commerce is traditionally a tough field for startups to gain scale in because of the dominance of Amazon.com Inc. across product categories.
Representatives for Etsy, Goldman Sachs and Morgan Stanley declined to comment.
Niche Marketplace
E-commerce in the U.S. is expected to reach $493.9 billion in 2018 from $305.7 billion in 2014, according to research firm EMarketer. Amazon is the biggest Web retailer by revenue, with an online department-store approach offering a broad range of products. Etsy is competing in the craft niche where sites distinguish themselves with unique offerings and give artists a marketplace to showcase their work.
The IPO could be the first among e-commerce companies in 2015 after the industry raised $29 billion last year -- including fundraising by Chinese giants Alibaba Group Holding Ltd. and JD.com Inc., which raised $25 billion and $2 billion, respectively.
U.S. retailers Wayfair Inc., which sells home goods online, and food-delivery website GrubHub Inc. each tapped public markets in 2014 and have climbed an average of 46 percent since their debuts.
Etsy is led by Chad Dickerson, a former Yahoo! Inc. executive. It has offices in cities around the globe, including Berlin, Toronto and Melbourne. The company’s investors include venture capital firms Union Square Ventures and Accel Partners.
By: Leslie Picker and Alex Sherman; editors: Mohammed Hadi and Elizabeth Wollman.
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