Etsy filed with the SEC on Wednesday and announced its plans to go public. It intends to list its common stock on the NASDAQ Global Select Market under the ticker symbol “ETSY.” The move has been expected, and sellers have already debated whether going public would change the company.
While it’s generally difficult for individuals to participate in an IPO, and there appear to be no provision for users to participate per se, Etsy does have plans to reserve a portion of the shares to be sold in the offering through an IPO participation program for individual purchasers. The program will be administered by Morgan Stanley.
Looking at Etsy’s key strategies outlined in its filing, it looks like there are two nuggets that could be seen as good news for sellers: Etsy plans to offer “high-impact seller services” and make investments in marketing. “Seller Services help an Etsy seller spend more time on the pleasures of her craft and less time on the administrative aspects of her business. We intend to enhance existing Seller Services, extend their geographic reach and introduce new ones.”
Etsy also said it planned to increase its marketing spending on traditional and online media to increase awareness of its brand and “attract additional members to its ecosystem.” (Could we see Etsy TV commercials this fall?)
Lest you think Etsy might have second thoughts about its decision to allow sellers to use manufacturing partners for goods listed in the handmade category, Etsy’s prospectus specifically stated, “we intend to further develop our manufacturing program, our strategic partnerships and our public-private endeavors to bring the benefit of the Etsy Economy to more people and more communities.”
In his letter to prospective investors included in the filing, CEO Chad Dickerson tackled head-on the criticisms leveled against the company for its decision to expand the definition of “handmade”:
I have heard concerns that by allowing our sellers to partner with responsible manufacturers, we are diluting our handmade ethos. I share our community’s desire to preserve what is special about Etsy. After all, Etsy has always served as an antidote to mass manufacturing. We still do. With our vision of responsible manufacturing, we are promoting a new, people-centered model in which artisans can preserve the spirit of craftsmanship and grow responsibly by collaborating with people at small-batch manufacturers to make their goods. This brings more hands together to build both products and more diverse local, living economies. These local, living economies band together into a larger Etsy Economy made up of individuals with diverse roles but all sharing a collective vision of an economy based on community.
In his letter was also a section called, “Why Etsy Should be a Public Company” that included the following paragraph:
I believe the principles and resources of being a public company align well with the model of shared success that is fundamental to Etsy’s way of doing business, namely that we make money when our sellers make money. Investing in the growth of our business and increasing Etsy’s visibility will help elevate Etsy sellers and attract more buyers, which creates more opportunities for everyone.
Goldman, Sachs & Co. and Morgan Stanley & Co. LLC are acting as joint book-running managers for the proposed offering. Allen & Company is acting as co-manager.
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