Etsy targets US$300m in upcoming IPO, way above its original target

1 Apr 2015

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Tripling its original planned take, Etsy is hoping for US$300m from its public offering, with 19m shares being offered at an estimated price of US$14-US$16 a pop.

The company’s roadshow, whereby it will speak to potential investors about buying some stock early, started today and should see significant activity from the online marketplace.

Millions of shoppers and makers are connected on Etsy, which specialises in selling handmade items.

Rob Kalin set up the company in 2005 as a platform from which to sell his handmade, wooden computers.

Etsy reported US$195.6m in revenue in 2014. It says almost 20m people made at least one purchase through its site last year. However, it doesn’t return any profits, with its losses growing from US$796,000 in 2013 to more than US$15m last year, despite revenues climbing by more than half.

As reported by The Wall Street Journal, Etsy’s investors include venture-capital firms Accel Partners, Union Square Ventures, Index Ventures and Tiger Global Management LLC, which together own about a 62pc stake.

Each of these have since announced plans to reign in their stake, to a combined 52pc.

Etsy plans to use the proceeds of the IPO for general corporate purposes, such as financing additional growth. Some of the proceeds will also go toward Etsy.org, a non-profit the company created to support female entrepreneurs.

The company won’t receive any of the proceeds from the shares offered by existing investors.

Etsy image via Scott Beale on Flickr

Gordon Hunt is a journalist at Siliconrepublic.com

editorial@siliconrepublic.com