Wayfair Confirms $157M Series B as IPO Looms

3/7/14Follow @curtwoodward

One of the Boston area’s most closely watched private tech companies is sure giving people a lot to watch lately.

Wayfair, the e-commerce company that sells home goods ranging from sofas to power drills, confirmed on Friday that it’s raised a $157 million Series B investment round. The money came from growth-capital investors and was led by mutual-fund manager T. Rowe Price.

This news was telegraphed a few weeks back when Reuters reported that Wayfair was in the market for a new investment of this size, valuing the company at $2 billion overall. The Wall Street Journal confirms that valuation figure in its report today.

Wayfair has recently been engaged in some public one-upmanship with competitors. After One Kings Lane, based in San Francisco, made headlines with a reported $912 million valuation, Wayfair disclosed that its 2013 revenue was $915 million. Days later, its new fundraising and valuation figures leaked.

The real story here is that Wayfair is heading toward an IPO, which would be big news for Boston and for e-commerce. The New York financial press has also reported, based on blind sources, that Wayfair has even selected its bankers for the upcoming sale. And since Wayfair had less than $1 billion in revenue last year, it can take advantage of a JOBS Act provision and file its initial paperwork secretly.

Once the paperwork hits the public, we’ll be able to see how Wayfair stacks up against other top-tier competitors. Often mentioned is Seattle’s Zulily, an e-commerce company that held its IPO in November (NASDAQ: ZU).

Zulily’s business is a bit different on the details—it operates mostly on limited-time sales of merchandise geared specifically toward moms and kids—but it’s a close enough comparison for most public market investors. In its fourth-quarter earnings report, Zulily said it had sales of $257 million and $12.8 million profit, both figures representing healthy growth from a year earlier.

We should also note that, as with most companies making noise about an IPO, there’s always a possibility that this process leads a bigger public competitor to swoop in and take Wayfair off the table with an acquisition. But that would have to be a big competitor indeed.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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