Square Space Non-IPO: 4 Things to Know Before Direct Listing a Web Design Company
The epidemic prompted many small businesses to acquire the online storefront for the first time, sparking an e-commerce wave that swept the website-building platform Squarespace Inc. Helped accelerate their revenue growth.
Now Squarespace as a public company will test the flexibility of the speed of this e-commerce. Its shares are set to start trading directly on the New York Stock Exchange on Wednesday under the Tucker SQSP.
The company offers a variety of website building tools, including domains, e-commerce functions and marketing capabilities. Squarespace aims to work with small businesses with limited web skills as well as “big brands” that need more flexibility to customize based on their needs.
Squarespace sees itself playing into a number of trends, including the growing need for businesses to maintain direct relationships with their customers and the increasing emphasis on self-employed solutions that “rapidly displace expensive agencies.” The box, accessible to all and easy to use, “the company said in its filing with the Securities and Exchange Commission.
The company raised $ 300 million in the March funding round, which gave the company an enterprise valuation of $ 10 billion, and it is not making any new funding as listed. What else do you need to know about the company?
Increased revenue, lower profits
Squarespace posted revenue of $ 621 million in 2020, up from $ 485 million a year earlier. In the current financial year, the revenue has increased by 28%, which is ahead of the growth rate of 24% seen in the previous period.
The company rates 94% of its revenue based on subscriptions. Squarespace added about 700,000 new unique subscriptions in 2020, and the company revealed that more than two-thirds of the total subscriptions are annual.
Last year, about 70% of Squarespace’s revenue came from the United States, while the rest was international.
Squarespace was profitable last year, recording a net worth of about .6 30.6 million, although profits were down from $ 58.2 million in 2019. The company’s “core principles highlight a unique combination of profitability and massive growth,” wrote Rohit Kalkarni, an analyst at MKM Partners.
Despite the year-on-year profit streak, Squarespace posted a net loss of $ 10.1 million in the first quarter of 2021, compared to a loss of $ 1.1 million a year earlier. The company posted profits in each of the last three quarters of 2020.
Abundance of competition
The company competes with various players in the e-commerce industry, according to its filing. Square Space counts web creation platforms such as Wix.com Ltd. WIX,
And Square Inc.’s SQ,
E-Commerce Powerhouse Shopify Inc. With SHOP, Weebly among its competitors,
Which allows businesses to set up online stores.
Squarespace GoDaddy Inc. Also calls rivals like GDDY,
Those that offer domain name tools, as well as those that provide email marketing and scheduling functions, argue that its own “comprehensive, all-in-one platform, multi-channel commerce capabilities” is an asset. Are
Jeffreys analyst Brent Thall notes that Wix is larger than Squarespace, which had revenue of $ 989 million last year, compared to $ 621 million for Squarespace. In addition, SquareSpace’s revenue was posted last year at Wix’s 2018, but Wix was growing rapidly on that scale, and without the benefit of the epidemic-driven acceleration in e-commerce, he wrote.
On the menu
Squarespace recently closed its ٹو 415 million acquisition of Tok, a company focused on the restaurant and hospitality industries. Tock’s services allow businesses to make reservations, take outs, event ticketing and more.
MKM’s Kalkarni suggested that this segment of the business could make SquareSpace more competitive than the tech giants.
“SquareSpace’s offer with Tock faces competition from delivery services like Uber Eats and UBER.
Indoor dash dash,
And Grubhub GRUB,
With other restaurants [customer-relationship management] Services such as touch bistro and toast, “he wrote.
At the same time, the acquisition is an example of a way in which Squarespace “cleverly diversifies not only the sale of physical goods online but also calendar / scheduling capabilities (restaurant or gym reservations), content sales, and subscriptions.” What’s up, “he continued.
Squarespace’s marketing and sales costs are growing faster than its revenue. The company spent 3. 3.1 million on such expenses last year, up from 7 1.7 million in 2019, a 45 percent increase, while revenue grew 28 percent over the same period.
The company’s podcast ads may be familiar to most listeners, although Squarespace notes in its prospectus that they include “online keyword search, sponsorship and celebrity endorsement, television, podcast, print and online advertising.” , Using email and social media marketing to promote its services widely. “
Among its risk factors, Squarespace points to the possibility that Alphabet Inc.’s GOOG,
Google may change its algorithm or increase the price of its search engine-marketing tools.