Wayfair Raises $319M in Quiet IPO Market, Leads Way Nationally

[Updated, 4:30pm. See below] Twelve years in the making, Boston e-commerce company Wayfair will be publicly traded as of today.

The online retailer of furniture and home goods priced its initial public offering at $29 a share (above the projected range of $25-28) and sold 11 million shares, bringing in $319 million. Wayfair is valued at $2.4 billion and is slated to begin trading on the New York Stock Exchange Thursday morning under the symbol W.

It’s the Boston tech scene’s most anticipated IPO in years. But the deal is also significant for the national IPO market, and for the near-term future of e-retail companies.

Alibaba’s public debut is widely credited with clearing out the U.S. tech IPO queue in the third quarter of this year. And a report in Bloomberg that data-storage firm Box will delay going public until 2015 because of volatile market conditions suggests the slowdown in tech IPOs may continue.

But any IPO timing issues could be related to “company-specific problems, not a market problem,” says Anand Sanwal, the CEO of CB Insights, a software firm that tracks data on private companies and venture capital. While the IPO market has “definitely slowed down recently,” he says, the availability of private funding means companies can be picky about when they go public.

In any case, it’s finally the right time for Wayfair. The company’s story is pretty much the opposite of an overnight success. Wayfair was bootstrapped and profitable for almost a decade before it took big venture and growth-equity rounds in 2011 and 2014. Heading into the IPO, founders Niraj Shah and Steve Conine each still owned 28.9 percent of the company; their financial patience should be well rewarded.

After a long dry spell, the Boston area has seen a few tech IPOs this year: Care.com, Imprivata, and CyberArk (an Israeli company with U.S. headquarters in Newton, MA). The next one expected is from marketing firm HubSpot, which could go public this month.

Wayfair and its Boston IPO mates are relatively unheralded on the national stage. They still have lots to prove. “I don’t know if these are market-making companies,” Sanwal says, but “if they do well, they open up their industries.”

[Updated] Wayfair’s stock (NYSE: W) opened at $36 a share on Thursday and went as high as $39.43 before closing at $37.72, or 30 percent above its IPO price. The company is now valued at over $3 billion.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and Editor of Xconomy Boston. E-mail him at gthuang [at] xconomy.com. Follow @gthuang

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