Wayfair, a high-growth online retailer of home goods with over $1 billion in sales, announced terms for its IPO on Friday. The Boston, MA-based company plans to raise $292 million by offering 11 million shares (5% insider) at a price range of $25 to $28. At the midpoint of the proposed range, Wayfair would command a fully diluted market value of $2.4 billion.
Business
The company operates five e-commerce sites, including Wayfair, Joss & Main, AllModern, DwellStudio and Birch Lane. It delivered 2.2 million in the 1H14, up 77% over the same period in 2013. Wayfair's average order value was $211, trending down slightly. Orders placed on mobile devices rose 6.6 percentage points to 28%, and repeat customers now represent over half of all orders.
Three online retailers have gone public in 2014, all of them Chinese, including Alibaba (BABA), JD.com (JD) and Jumei (JMEI). French/Brazilian e-commerce site Cnova (CNV) is still in the pipeline for an IPO that could raise $1 billion.
Shareholders
Primary shareholders include co-founder and CEO Niraj Shah, co-founder and CTO Steven Conine, Great Hill Partners, HarbourVest Partners and Battery Ventures. Wayfair's dual class structure gives voting control to existing shareholders instead of IPO investors.
Financials
Net revenue grew 50% to $574 million during the six months ended June 30, 2014. Wayfair's Gross margin fell 150 bps to 23% due to pricing and product mix. Adjusted EBITDA loss widened to $37 million from $2 million as the company nearly doubled its marketing spend.
Wayfair, which was founded in 2002 and booked $1.1 billion in sales for the 12 months ended June 30, 2014, plans to list on the NYSE under the symbol W. Goldman Sachs, BofA Merrill Lynch and Citi are the joint bookrunners on the deal. It is expected to price during the week of September 29, 2014.
