Squarespace, which provides an easy-to-use platform for businesses and individuals to create websites, filed on Friday to register its shares with the SEC and complete a direct listing on the NYSE. The profitable company will not raise new capital as existing shareholders sell the Class A shares listed. Squarespace did not disclose the initial tradeable float, a reference price, or anticipated time of its listing.
In the first quarter of 2021, the company raised $308 million in a private placement by selling roughly 4.5 million shares at $68.42 per share. At that price, Squarespace would command a market value of $9.3 billion and an enterprise value of $9.7 billion (15.6x EV/sales, 83.1x EV/EBITDA).
Squarespace provides an all-in-one web design platform that offers websites, domains, e-commerce, social media management, and marketing tools. The core platform provides intuitive design tools that allow the quick and easy creation of professional-quality mobile and desktop websites. Then, users can easily integrate their business to begin selling physical products, services, or subscriptions. Squarespace also provides a suite of marketing tools such as email campaigns and search engine optimization. As of December 31, 2020, the company had 3.7 million unique subscriptions, and notes that there are an estimated 800 million small businesses globally that are potential customers.
For the year ended December 31, 2020, revenue increased 28% to $621 million and gross margin expanded 1 percentage point to 84%. Adjusted EBITDA increased 20% to $117 million, and adjusted EBITDA margin contracted 1 percentage point to 19%.
The New York, NY-based company was founded in 2003 and plans to list on the NYSE under the symbol SQSP. Squarespace filed confidentially on January 27, 2021. It had been on our Private Company Watchlist since June 2019. As a direct listing without a firm commitment offering, there are no underwriters on the deal; instead, Goldman Sachs, J.P. Morgan, Barclays, RBC Capital Markets, Citi, BofA Securities, William Blair, Raymond Jones, JMP Securities, KeyBanc Capital Markets, Piper Sandler, Mizuho Securities, Fifth Third Securities, and Citizens will serve as financial advisors.
