Etsy announced its plans to go public as soon as this quarter with the goal of raising around $300 million. If it succeeds it would be the biggest New York tech IPO since 1999. The craft and vintage goods site has been valued at more than $1 billion and is reported to bring in $1.35 billion in gross merchandise sales. Etsy profits by charging sellers 20 cents to list products and takes another 3.5% commission on all items sold.
Etsy was originally founded in New York in 2005 as a way for its founder, Robert Kalin, to sell his hand-built goods. It has since then seen tremendous popularity. With revenue still growing at close to 60% a year, Etsy seems to have successfully tapped into a new vertical in the ecommerce world. And with so much commerce noise on the internet today, that’s a pretty rare accomplishment.
However, the news of the company going public is raising some concerns among its core customers, bringing up questions about the company’s core identity and customer base. Etsy tapped into the DIY and vintage loving hipster segment of the millennial generation. Although DIY’ers and vintage connoisseurs are nothing new, an e-commerce site catering specifically to buyers and sellers within the vertical is.
Mixing the DIYers and crafters of Etsy with Wallstreet makes for an interesting image, an image the company’s core customer base may not be a fan of. Although growth and development is good, its important for brands to keep their identity in mind to avoid alienating their following. Etsy needs to tread lightly with their steps towards going public to ensure it doesn’t impact their core business model and ultimately their relationship with the arts and crafts buyers and sellers it caters to.