Care.com Raising $91M in IPO
Online caregiver marketplace Care.com is raising about $91 million in its initial public stock offering, topping its previously projected price in the Boston area’s first venture-backed technology IPO in more than a year.
The Waltham, MA-based company sold its shares Friday night at $17 each, slightly higher than an earlier estimated price range of $14-$16. The company had set aside 5.35 million shares for the sale, giving it proceeds of about $91 million.
That’s actually less than the total amount of venture capital that Care.com has raised since its 2006 founding, but the company could reap a bit more cash if there’s enough demand for another roughly 800,000 shares available for the IPO’s big-bank underwriters. Public trading was set to begin Friday (NYSE: CRCM).
The IPO will likely be welcomed by the Boston-area tech sector, which has seen lingering questions about its health and standing as New York has attempted to build a strong startup ecosystem. But Care.com is also an established company, making it a somewhat imperfect lens for viewing today’s Boston technology scene.
CEO Sheila Marcelo founded Care.com after working as an entrepreneur-in-residence at Matrix Partners, the Waltham venture firm that owns 22 percent of the company’s shares. Other VC firms holding significant stakes in the company are Trinity Ventures, New Enterprise Associates, and Institutional Venture Partners.
The company has raised some $110 million in private investment dollars over its lifetime, including a $50 million Series E round in 2012.
Care.com makes money by charging businesses and consumers for its services, which help people find providers in childcare, tutoring, and other personal service fields. The company claims 5.1 million families and 4.4 million caregivers are using its network.
Care.com lost about $12.2 million on roughly $26 million of revenue in 2011, and saw that loss hit about $20.5 million on $48.5 million in sales for 2012. Over the first nine months of last year, Care.com lost nearly $24.7 million on about $59 million in revenue.
Most of its spending has gone to sales and marketing, including $43.9 million in the first nine months of 2013. That was up significantly from the $27.9 million spent across the same period in 2012.
Care.com’s founding story comes with a dose of controversy—Boston.com has a fascinating look at the backstory in this 2009 report, which includes allegations from a similar website that Marcelo and Matrix started Care.com after a proposal to invest in the other business fell through. Marcelo has denied any wrongdoing.