Etsy Looking to Raise $300M With Q1 IPO

Long rumored and often wooed by big banks wanting to take the company public, the Brooklyn-based handmade crafts seller Etsy has announced that it will go public sometime in the first quarter of 2015, sources inside the company confirm. Working with Goldman Sachs and Morgan Stanley, Etsy is looking to raise up to $300 million in the offering, which would make it the biggest New York City tech startup since the height of the dot-com bubble in 2009, and maybe not the only NYC startup that goes public this year.

Founded in 2005 as a way to sell wood-carved computers, Etsy has had a meteoric rise from its humble beginnings in the hipster stronghold of Dumbo, Brooklyn. The company recorded $1.35 billion in sales as of 2013 on its website, which is monetized through a 20 cent listing fee and a 3.5-percent commission for all sales. This was heightened thanks to investments in direct checkout back in 2012 and an mPOS reader that was launched last October. With the e-commerce market expected to reach $493.9 billion by 2018, an over 25-percent increase from the $305.7 billion it is today, investors are hoping Etsy has a lot more room to grow. With a move to wholesale purchase orders in 2014 as well, Etsy will be in a position to move more inventory and generate higher sales, which will be what future investors will be looking for once the stock goes public.

Some analysts are hoping that Etsy’s foray into the public market will be a harbinger of things to come for NYC tech startups like AppNexus and Gilt Groupe, which have been valued at over $1 billion according to initial estimates. Thanks to a proliferation of mobile payments and direct checkout software, e-commerce has become more convenient for small companies, which translates into improved customer relations, higher sales, and eventually a stable footing to take public once capital becomes required to truly grow their companies. Depending on Etsy’s success in this sector, this may be an interesting area to watch down the line.