Zulily, Not Gilt Groupe, Will Be the First Deals Site to Go Public Since Groupon
Zulily, the discount e-commerce site targeted at moms, has filed its S-1 documents with the SEC to go public in a $100 million IPO.
The company will be listed on Nasdaq under the ticker symbol ZU, in what will be the first public offering by an e-commerce company that specializes in selling goods in a flash-sale model — and the first deals site to go public since Groupon.
The Seattle-based online retailer sells clothes and accessories for women, children and babies at a discount in so-called flash sales that typically last 72 hours, a model that spurs impulse buying.
“Offerings are only available for a limited time and in a limited quantity, creating urgency to browse and purchase,” the S-1 reads.
The four-year-old startup recorded revenue of $272 million in the first half of the year, compared to $127 million in the same period last year, and generated $2.4 million in net income. Zulily lost $10.3 million on revenue of $331.2 million in 2012.
Zulily is one of a handful of commerce sites that have been able to build a giant business off of flash sales. Among the others are Gilt Groupe and One Kings Lane, while Fab recently said it was ditching the model. Another, HauteLook, was acquired by Nordstrom.
Gilt, under the leadership of new CEO Michelle Peluso, could file its own IPO paperwork as early as next year.
But the model still is relatively new and unproven. Zulily said as much in its filing, when it lists as a risk the possibility that customers may stop enjoying this model of shopping.
Among its other risks: Since the company typically doesn’t take on inventory from its sellers until an order has been placed, its order-to-delivery times are relatively long, at 10.6 days in the second quarter of this year. This may at some point become unacceptable to online shoppers who are used to two-day shipping from the likes of Amazon.
“Our relatively slower delivery times may place us at a competitive disadvantage to other e-commerce retailers,” the filing reads. “If we are required to decrease our delivery times to address this competition or to meet customer demands, we may be required to incur additional shipping costs, which we may or may not be able to pass on to our customers, or to change our operations to carry additional inventory and face additional inventory risk, either of which could adversely affect our business, financial condition and operating results.”
The company has raised $139 million from Maveron, August Capital and Andreessen Horowitz. Those entities own 23.6 percent, 7.5 percent and 7.3 percent of Zulily, respectively, according to the filing.
Zulily CEO Darrell Cavens still owns 20.9 percent of the company, while chairman Mark Vadon owns 30.4 percent. Cavens was previously the CTO of online diamond seller Blue Nile, where Vadon served as CEO.