Etsy Inc. made an amended filing with the Securities and Exchange Commission for the pricing of its initial public offering (IPO). The offering is for 16.667 million shares with a proposed price range of $14 to $16 per share. Considering the overallotment option for an additional 2.5 shares, that would value to total offering up to $306.67 million. The company plans to file on the Nasdaq Global Select Market under the symbol ETSY.

If we use the 110.96 million common shares outstanding after this initial offering and the middle of the $14 to $16 price range, then Etsy will have an implied market cap of $1.664 billion. What is interesting about this roadshow being set is that the initial IPO filing just came on March 5. This is also late by our standards, as we listed Etsy as a top IPO to watch in 2014.

The underwriters for the offering are Goldman Sachs, Morgan Stanley and Allen & Co.

Note that Etsy is selling 13.333 million shares in the offering, in addition to the 3.333 million shares from selling shareholders.

The company operates a marketplace, both online and offline, where users make, sell and buy unique goods. Handmade goods are the foundation of this marketplace. Etsy believes it is creating a new economy, which it calls the Etsy Economy, where entrepreneurs can find work, as well as both global and local markets for their goods.

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Etsy was originally founded in June 2005 in Brooklyn, as a marketplace for handmade goods and craft supplies. The company has since built on this with a technology-based platform. At of the end of 2014, it had 54.0 million members, including 1.4 million active sellers and 19.8 million active buyers. In 2014, Etsy sellers generated gross merchandise sales (GMS) of $1.93 billion, of which 36.1% came from purchases made on mobile devices and 30.9% came from an Etsy user outside of the United States.

Revenue is diversified through a mix of marketplace activities and the services Etsy provides. Marketplace revenue includes the fee an Etsy seller pays for each completed transaction and the listing fee an Etsy seller pays for each item listed. There are also fees for services such as prominent placement in search results via Promoted Listings, payment processing via Direct Checkout and purchases of shipping labels through its platform via Shipping Labels. Other revenue includes the fees received from a third-party payment processor.

In 2014, Etsy sellers generated GMS of $1.93 billion, up 43.3% from 2013. In 2014, the company generated revenue of $195.6 million, up 56.4%. However, at the same time, Etsy generated a net loss of $15.2 million and adjusted EBITDA of $23.1 million, compared to a net loss of $0.8 million and adjusted EBITDA of $16.9 million in 2013.

Etsy described its use of the proceeds in the filing:

The principal purposes of this offering are to increase our visibility, create a public market for our common stock and facilitate our future access to the public equity markets. We currently intend to use the net proceeds from this offering for working capital and general corporate purposes, including continued investments in the growth of our business. Consistent with our values and our mission, we also intend to use $300,000 of the proceeds of this offering to partially fund Etsy.org, a Delaware non-profit organization that we formed in January 2015.

FULL AMENDED ETSY FILING

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