A Handmade IPO for Bankers, BrokerDealers and Maybe Investors

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etsy ipo

BrokerDealer.com blog IPO update and profile of Etsy.com pending initial public offering is courtesy of extract from 5 March story by Bloomberg View’s Matt Levine, “The Etsy IPO and the Triangle Document.” Brokerdealers and bankers alike have been anticipating Etsy’s IPO launch as it could be a big test for companies that have growing businesses and devoted followings and are considering launching their own IPOs. Etsy is a peer-to-peer e-commerce website focused on handmade or vintage items and supplies, as well as unique factory-manufactured items. Now from Bloomberg View’s Matt Levine…

How twee.

You occasionally read about banks’ pitches to take hot companies public, and they are often cringe-worthy: Bankers wore band t-shirts to pitch Pandora, and UBS dressed “around 75 of its employees in Lululemon gear and had them descend upon Central Park for a ‘flash mob’ yoga session” to pitch Lululemon for some reason. What do you think Goldman Sachs, Morgan Stanley and Allen & Company did to win the Etsy initial public offering? Did they hand-write the pitchbooks in fountain pen? Crochet them? Or just produce them normally in PowerPoint on their computers, but they were wooden computers? Did everyone else know about this?

The company was founded by Rob Kalin, a carpenter making handmade wooden computers with nowhere to sell them.

So obviously the Internet beckoned. Anyway, Etsy filed its preliminary prospectus yesterday, without a lot of capitalization numbers; Bloomberg reports that it’s seeking to sell about $300 million of stock, while DealBook estimates its pre-money valuation at about $322 million, so, that’s kind of weird. Use of proceeds is “general corporate purposes,” as one does, plus putting $300,000 — 10 basis points of the deal? — into the company’s Etsy.org nonprofit. But unlike a bunch of the internetty companies that I make fun of for going public for no particular reason other than cashing out insiders, Etsy is growing, had a $15.2 million net loss last year, and could probably use the money. (It’s also cashing out some insiders obviously.) The filing also emphasizes “authenticity” and includes this graphic explaining why Etsy works:

To continue reading Matt Levine’s article from Bloomberg View, please click here

Uber Snags $1.2Bil in Funding at $17Bil Valuation: Deal Investors Drive Record Raise for Car-Ride Service

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A BrokerDealer.com/blog special:

Bankers, Broker-Dealers, venture and private equity investors, and the universe of fast-growth start-ups who keep an eye on the pulse of pre-IPO funding rounds were salivating on Friday after Uber, the car ride service, announced it raised $1.2bil from “institutional investors, mutual funds, private equity and venture capital,” with a second round of investors coming soon. The new round of financing values the company at a total $18.2 billion. The company’s pre-money valuation, not counting the latest round of funding, was $17 billion.

Investors hope the company, which allows users to summon a ride on their smartphones, can expand globally and diversify into logistics.
The investors in the round valued Uber “pre-money” at $17 billion, the blog post said. The $1.2 billion infusion took the startup’s valuation to $18.2 billion.

Fidelity Investments put in about $425 million, Wellington Management added $209 million and BlackRock Inc contributed $175 million, according to a person familiar with the matter.

Venture firms Summit Partners, Kleiner Perkins Caufield & Byers, Google Ventures and Menlo Ventures also participated in the round, a person familiar with the matter said. Kleiner’s investment came from its Digital Growth Fund, run by former stock analyst Mary Meeker, known for her bullish recommendations during the first dot-com boom. Her fund has had recent hits, including traffic app Waze, acquired last year for $1.1 billion by Google.

“Uber is one of the most rapidly growing companies ever, and we believe there are opportunities for continued tremendous growth,” Joan Miller, a spokeswoman for Summit Partners, an investor in the funding round, said by telephone.Uber, which did not give details about its latest investors, operates in 128 cities across 37 countries.

Kalanick said he expected to close a second round of funding from strategic investors of about $200 million