Once upon a time, there were few places that the not-so-technically-inclined could go to secure their own slice of web real estate and build themselves a professional-looking websites. Either they had to speak Internet, or they’d have to pay someone who did a boatload. Just as WordPress, Blogger, Tumblr and others would put blogging, content creation and the ability to chronicle what your cat is having for dinner into the hands of the public, Wix.com launched in 2006 to do the same for website creation.
Capitalizing on the maturation of the Web and an escalating demand for “DIY” web design and publishing tools, the Israel and U.S.-based company has since grown to a team of 400 strong, has raised $60 million from investors and has built a user base of 37 million registered users. Behind this strong growth over the past three years, the company quietly announced today that it is officially heading to the public markets — the New York Stock Exchange, to be precise — under the ticker symbol “WIX.”
The website creation platform isn’t hesitating. Today’s filing comes less than four months after the company took its first it submitted its draft registration statement to the SEC — the first public indication that the startup was on the road to a public offering. Of course, it’s been unclear whether Wix would be confident enough in its rate of growth and future prospects to pull the trigger right away or whether it would choose to wait.
But, with the IPO market heating up thanks to Twitter et al, Wix has opted to press on, filing its official registration statement and F-1 with the SEC today, demonstrating its intent to go public in the near future. While the date is not set yet, and its valuation and share price price range have not yet been determined, the company did make clear that it intends to list its stock on the NYSE and plans to raise up to $100 million ahead of its IPO.
According to the statement, the $100 million IPO will be underwritten and managed by J.P. Morgan Securities, BofA Merrill Lynch, RBC Capital Markets and Needham & Company — with the latter two acting as co-managers.
J.P. Morgan Securities LLC and BofA Merrill Lynch are acting as lead joint bookrunners for the proposed offering. RBC Capital Markets, LLC is acting as other book-running manager and Needham & Company, LLC and Oppenheimer & Co. Inc. are acting as co-managers.
Today’s filing also gives us the first glimpse inside Wix’s business, its growth rate and what to expect going forward. On the bright side, the company said that it has “achieved 14 consecutive quarters of sequential growth in the accumulated number of premium subscriptions … and 14 consecutive quarters of growth in revenues in collections.” Going further, the company generated $9.9 million in revenue in 2010, which grew to $24.6 million in 2011 and $43.7 million in 2012, with collections of $13.8 million, $29.6 million and $52.5 million, respectively. In turn, Wix generated $34.1 million in revenue, with collections of $41.9 million for the six months ended June 3rd, 2013.
Furthermore, the company’s user base grew from 6.5 million at the end of 2010 to 28.2 million at the end of 2012, representing a 108 percent compounded annual growth rate, while its premium subscription base has grown from 149K to 469K over the same period, representing a 78 percent compounded annual growth rate. As of August 30th, 2013, Wix’s premium subscription base has grown to 679K.
It’s not all sunshine and roses, however, as Wix posted a net loss of $11.5 million in 2010, $22.7 million in 2011 and $15 million in 2012, respectively, along with a net loss of $10.1 million during the six months ended June 30th.
The filing follows six months of relative quiet for the company, considering the slew of significant product announcements that defined the previous 12 months for the company, including the launch of its new app market and SDK in October. The new app market was part of the company’s effort to build an ecosystem around its platform, and drive value, by enabling third-party developers to integrate their apps into its platform. Among others, the launch of its app platform followed the release of an HTML5 builder in March, allowing users to build sites that would “display across both PC and mobile browsers in a drag and drop format that Wix co-founder Avishai Abrahami compared to HTML5 for Dummies.'”
The move was evidence of the company’s growing focus on mobile, a strategy which Abrahami claimed in December had not only been working but had led to its current position as the “largest mobile site builder in existence,” with users (at the time) creating mobile sites at a rate of 50K sites/month.
While it’s this perspective that no doubt led Wix to claim in its filing today that it does not compete with any “provider that offers the same design capabilities or range of products and services that we offer,” it’s difficult to believe that Wix completely stands alone on the competition front.
At the very least, the company seems to have been spurred along by the growth of, Weebly in particular, as the Y Combinator grad appears to have been experiencing strong growth of late. Founded in 2007, Weebly is now seeing 100 million unique visitors per month, which have collectively created 15 million sites on its platform, and the company plans to add 500+ employees over the next couple of years, along with a move into big, new headquarters in San Francisco.
Nevertheless, Wix has a head-start and appears to be the clear leader in this space in terms of size of its user base and revenue growth. The Israeli-American startup has raised $60 million from investors like Bessemer Venture Partners, Mangrove, Benchmark, DAG and Insight Venture Partners, and The Globes reported that the company planned to raise $75 million at a $400 million valuation ahead of its IPO.
This is likely a conservative estimate as we now know that the company could raise up to $100 million ahead of its initial public offering, and although we don’t yet know Wix’s valuation, if we project that the company will generate somewhere in the ballpark of $75 million in revenue this year, and we apply a 7 to 8x multiple, then the company’s valuation could be fall in the $500 to $600 million range — although, at this point, this is just speculation.
Either way, it marks the impending exit of another strong Israeli startup, and adds to the increasing excitement on the tech-side of the IPO market. Stay tuned for further updates, and find Wix’s F-1 filing here.