Contact: Scott Denne
Wayfair preps a public offering, setting itself up to be among the few e-commerce companies to obtain liquidity at an attractive price. Exits for online retail vendors have been tough to come by – there have been few recent IPOs, and the value and volume of acquisitions have declined.
The home décor retailer posted $1.11bn in trailing revenue, with a $59.6m loss, while growing about 50% year over year. Its financial profile is similar in sales and spending to Zulily, except the latter company has grown nearly twice as fast through the first half of 2014, and has slightly better margins and a bit lower operational costs that have tipped it into the black, while the red ink has grown on Wayfair’s income statement.
Wayfair’s slower growth will likely translate into an enterprise valuation that’s lower than the 4.5x trailing revenue Zulily posts. Even a multiple that’s half what Zulily fetches would be a strong bump from the roughly $1.8bn post-money valuation on Wayfair’s last round, and well above the 0.5x median multiple in acquisitions of e-commerce providers in the past 24 months, according to The 451 M&A KnowledgeBase.
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