1stDibs.com, Inc. has filed an S-1 with the U.S. Securities and Exchange Commission (SEC), proposing an initial public offering (IPO).
The number of shares to be offered and the price range for the proposed offering have not yet been determined. The company, an online secondhand marketplace aimed at connecting interior design lovers with sellers and makers of luxury fashion, furniture, home décor, art, jewelry and watches, listed the size of its IPO as $100 million, a placeholder amount that will likely change.
Upon going public, 1stDibs could seek a valuation of more than $1 billion, Bloomberg News reported. 1stDibs applied to list its common stock on The Nasdaq Global Market under the ticker symbol “DIBS.”
The marketplace has capitalized on the popularity of resale, with more of the focus here on furniture, art and other home décor. One report from ResearchandMarkets estimates that the furniture resale industry could hit $16.6 billion in sales by 2025, a 70 percent increase from 2018.
But when combining its core market of high-quality design furniture and homewares, fine art, watches and jewelry with the personal luxury goods market, the company sees a much bigger total ahead, citing Bain & Company estimates that the total addressable market size was $339 billion as of 2020.
In its filing, 1stDibs estimates that its total seller stock value—the total value of all products listed on the marketplace—surpasses $10.9 billion.
To start the year, the marketplace far outpaced its annual growth. While 1stDibs grew its gross merchandise value (GMV) from $13.8 million in 2013 to $342.6 million in 2020, a compounded annual growth rate (CAGR) of 58 percent, the marketplace’s most recent quarterly GMV jumped 64 percent year over year to $113.7 million from $69.3 million.
From a sales standpoint, 1stDibs grew net revenue 16 percent to $81.9 million in 2020, from $70.6 million in 2019. In the latest quarter, revenue jumped 43 percent to $25.5 million from $17.9 million.
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As it invests further in its growth, the company said it expects to “continue to incur net losses for the foreseeable future,” but even those losses have leaned out. In 2019, 1stDibs saw a net loss of $29.9 million and adjusted EBITDA losses of $25 million, compared to a net loss of $12.5 million and adjusted EBITDA of $6.6 million in 2020. In the quarter ended Mar. 31, 2021, 1stDibs saw a net loss of $2.2 million and adjusted EBITDA of $1.3 million.
At the end of 2020, the company had more than 58,000 active buyers with an average aggregate purchase per year of over $5,500, an average order value (AOV) above $2,500, a median order value of $1,200 and an average of 2.2 orders per active buyer. The company defines active buyers as those who have made at least one purchase through the marketplace over the 12 months prior to March 31.
Active buyers increased 27 percent in 2020 from the nearly 46,000 buyers in 2019. But this growth jumped even higher to 39 percent in the first quarter of 2021, with total shoppers reaching 64,731, above the year-ago quarter’s total of 46,658.
Last year, 1stDibs said it retained 36 percent of the 2019 on-platform GMV from buyers acquired in 2019. In 2019, it retained 35 percent of the 2018 on-platform GMV from buyers acquired in 2018.
1stDibs also offers a “Trade 1st” program for highly experienced interior designers, whom the company refers to as “trade buyers.” Trade buyers are frequent, repeat purchasers on the online marketplace and accounted for 27 percent of our on-platform GMV in 2020.
Fashion buyers often include fashion houses and museums, along with collectors and fashion lovers seeking to add unique pieces to their archives and collections. Popular products include vintage Alexander McQueen dresses, Chanel jackets, and Hermès Birkin and Kelly handbags.
Through the program, the company offers these trade buyers additional benefits such as trade-only personalized support, exclusive trade pricing and buyer incentives. The Trade 1st program is a buyer-only program and members do not pay any fees to participate in this program.
1stDibs enables buyers to interact with its more than 4,200 sellers on the platform across 55 countries, and throughout all stages of the transaction, including item inquiries, price negotiations and customization requests. The company says that in each month in 2020, it facilitated an average of more than 36,000 conversations between sellers and buyers on the platform.
All sellers undergo a comprehensive evaluation by in-house experts to vet the integrity of their listings and the quality of their service. Before their items appear on 1stDibs, all sellers must apply for review by the 1stDibs experts, which have a background in numerous fields such as contemporary and vintage furniture, fine art, jewelry and fashion.
The team consists of internal and external experts, with the company saying that they come from “the top auction and retail houses, iconic brands, as well as the industry’s most reputable art and design businesses.” The experts work with more than 25 leading estates and foundations, with the partnerships designed to ensure the integrity of the pieces attributed to the artists and designers they represent.
All sellers are evaluated on the appropriateness and quality of their inventory. This may involve requests for samples to assess a collection, in-person visits to prospective sellers’ workshops, audits of social media accounts and industry editorial coverage—as well as a review of their interactions with customers to gauge service commitment and industry reputation.
If a shopper discovers that a seller listed the same item for a lower price elsewhere, 1stDibs will match the lowest price. Additionally, protective measures cover buyers when items are significantly different than described or have been damaged in transit. Buyers have to report the issue within seven calendar days of the delivery date (or the promised delivery date, for non-delivered items). Shoppers also have a 24-hour grace period in which to reconsider their purchase.
Although the platform is largely known for vintage and antique furniture, it is including new and custom furniture on the site as well.
The new offerings have even gotten the attention of a fashion icon. CFDA fashion designer Christian Siriano launched an exclusive 10-piece furniture collection at 1stDibs earlier this month, expanding his expertise from fashion into interior decoration. The furniture line ranges in price from $795 to $4,600. Siriano launched his design studio, Siriano Interiors, in January.
In the S-1 filing, the company said it believes there are also opportunities to expand into additional sales formats, including an auction format.
And since 39 percent of the supply on the online marketplace comes from outside the U.S., while only 19 percent of buyers are located internationally, the company believes a large international expansion opportunity exists, “particularly within France, Germany, Switzerland, Italy, and China, where we have existing demand.”
Approximately 33 percent of current traffic comes from outside the U.S.
Bank of America and Barclays will act as joint lead bookrunning managers of the filing, while Allen & Company LLC and Evercore ISI will act as joint bookrunner managers.