Etsy Inc., the website founded a decade ago by a carpenter looking to sell wooden computers, nearly doubled in its trading debut after raising $267 million in an initial public offering.
A marketplace for handmade and vintage goods, Etsy opened up 93 percent at $31 at 10:49 a.m. in New York. The Brooklyn-based company and some of its backers sold 16.7 million shares for $16 apiece. Another highly watched IPO, by Virtu Financial Inc., is also expected to start trading Thursday. Like Etsy, Virtu priced its shares at the top of the marketed range.
Etsy’s offerings include a knit coffee warmer for $6.50 and a 1960 metal typewriter for $85. Etsy makes revenue by charging sellers listing fees and commissions. As a public company Etsy’s challenge will be to keep the artisans and craftmakers who sell their products on the site happy, as the it also seeks to build scale for investors.
The IPO is a first for a B Corporation, a distinction given to businesses that meet exacting standards with regard to social and environmental performance. Proceeds will be used to invest in the business, except for $300,000 which will fund Etsy.org, a non-profit for educating women and minorities on how to create their own businesses.
Etsy plans to invest in marketing and logistics to expand globally, as well as enhance seller services. The company also wants to develop its manufacturing program — started in October 2013 to allow sellers to outsource production and fulfillment. The policy helped some sellers become six-figure successes, while others, purely focused on handmade items, saw their sales decline amid competition from less expensive products.
Sales amounted to $195.6 million last year, a 56 percent jump from 2013. As the end of 2014, Etsy had 1.4 million active sellers and almost 20 million buyers. Women account for 86 percent of the sellers.
The company was founded in 2005 by Rob Kalin, a carpenter making handmade wooden computers with nowhere to sell them. He left the company in 2011 and was replaced as chief executive officer by Chad Dickerson, 42, a former Yahoo! Inc. executive.
Accel Partners, Index Ventures and Union Square Ventures planned to sell shares in the IPO, filings show. Accel will own 22.4 percent of Etsy after the offering, while Index Ventures will hold 10.6 percent. Union Square will have a 12.6 percent stake, while CEO Dickerson will own 1.9 percent of the company.
Goldman Sachs Group Inc., Morgan Stanley and Allen & Co. managed Etsy’s IPO. The shares are listed on the Nasdaq Stock Market under the symbol ETSY.