There is little doubt venture capitalists had a strong
appetite for B2B startups in 2012, but the craving for B2C
e-commerce has remained surprisingly strong given the
disappointing performance form daily deals site leader Groupon (
), once hailed the biggest name in e-commerce 2.0. Significant VC
money was poured into flash sale/e-commerce 2.0 sites this year,
with the most recent examples being large late-stage funding
rounds completed by two IPO candidates earlier this week. One
Kings Lane, a flash sales site for home décor, raised $50 million
in a series D round, bringing its total funding to-date to $117
million. Wayfair, which operates a troika of home goods
e-commerce sites and does more than $600 million in gross
revenue, raised $36 million bringing its total funding to more
than $200 million.
Undeterred by the daily deal site flop
Recent funding rounds (and implied valuations) show many VC's
seem undeterred by Groupon's November IPO, which has shed more
than -76% in market cap year-to-date. While private daily-deal
sites such as LivingSocial have suffered similar valuations
declines, ongoing investment in e-commerce/flash sales seem to
indicate that VCs view the daily deals business model, which
primarily serves as a traffic driver for third party businesses,
in a different light compared to the e-commerce companies with
actual consumer facing sales operations. Overall, the private
e-commerce sector has continued to garner strong interest from
investors looking to capitalize on the new breed of online retail
companies looking to disrupt existing sales models or capitalize
on large fragmented consumer industries.
When will we see the e-commerce 2.0 IPO wave?
While VC-backed IPO activity has fluctuated between 40 to 60
deals per year over the last three years, there has been a
noticeable lack of e-commerce IPOs. Only seven e-commerce
companies have gone public since 2007, four of which have lost
over 70% from their offer prices including 2012 IPO CafePress (
). Outside of Groupon there has yet to be a US-based flash
sales/e-commerce 2.0 but the aftermarket success of China-based
flash sales site Vipshop (
) earlier this year could pave the way for an uptick in activity.
Vipshop, whose March offering was initially poorly received by
investors, has produced the largest aftermarket gains of any 2012
IPO (144%) and is currently trading 106% above its offer price.
Our Private Company Backlog currently holds 19 e-commerce
companies that in aggregate boast over $4.3 billion in funding
and $15.5 billion in revenue and each of which appear to be on
the IPO track within the next 12 to 24 months. While two major
e-commerce companies in China account for a large portion of
these figures, there are over a dozen companies with more than
$200 million in annualized sales. Notable e-commerce IPOs in our
Private Company Backlog include luxury flash sales site Gilt
Groupe, flash sales site for moms and children Zulily and China's
largest online clothing retailer VANCL.
for more information on our Private Company Backlog or how to
obtain the complete list of e-commerce companies that could go
public in the next 24 months.