Etsy expects to raise $100 million from its IPO.
Etsy, Inc., has announced that it will soon be having its IPO. However unlike other e-commerce sites like Amazon.com, Inc. Etsy only sold handmade or vintage goods. The company has filed the required documents with SEC and is looking to raise around $100 million and is expected to be open to public by the mid of April.
Etsy began operating in 2005 as an online stores. The company is considered as an ideal platform for artists and small time entrepreneurs, to show their talent and sell their products. Amazon on the other hand is one of the biggest e-commerce giant. The fascinating online dealer website which allows the sellers creativity to flow currently do not hold any retail outlet or shop, and much likely wouldn't be opening one soon likewise Amazon Inc itself.
Later the company revised its policy of selling only hand crafted goods, and allowed people to sell manufactured goods through its platform. Etsy received severe criticism for this move from its early members, who claimed that Etsy has lost its soul, though the decision ultimately led to an increase in sales.
Etsy earns its revenues by taking a small fee from its members for allowing them to post their products on its website, and takes a further commission of 3.5% when any product is sold. This business model, while being very simple has brought in sales of $195.6 million last year, an increase of 56% from its previous year's sales, although it suffered a loss of $15.2 million.
Etsy claims it has 1.4 million sellers and nearly 20 million buyers. The company has earned gross sales of $1.93 billion in the previous year.
Looking at its financial performance, the company admitted in its SEC report that they may not be able to able to generate any profits in the future. Etsy expects its expenses for running the business to grow, as it hires more workers. It also said that its plan for growth and introducing of new services will incur extra expenses for the company, while the revenues earned from such services may not be enough to overcome these expenses.
Company has not disclosed how many shares it will be releasing to public, nor has it disclosed the price for which they will be sold.
Etsy will trade under the ticker symbol of "ETSY" on NASDAQ. Its underwriters include Morgan Stanley, Goldman Sachs Group Inc and Allen & Company LLC.