Etsy Inc. is poised to carve out a big valuation for itself as the e-commerce company readies an initial public offering.
The online marketplace for handmade and vintage goods could seek about $300 million from the share sale as soon as this quarter, people familiar with the matter said. If it sells the 15 percent stake that’s typical of technology company IPOs, that would imply a valuation of about $2 billion.
While the Brooklyn-based company hasn’t disclosed an IPO prospectus yet, the Associated Press reported in May that the company’s been profitable since 2009. Other e-commerce companies, such as food pickup and delivery service GrubHub Inc. and mother and baby marketplace Zulilly, fetch around 100 times earnings.
Etsy charges for sellers to list their wares and takes a commission from each item sold. Like Alibaba Group Holding and GrubHub — which connect the buyers and sellers over the Web but do not serve as a merchant themselves — it uses a model that tends to have a higher profit margin, said Tom Forte, a retail analyst at Brean Capital.
“Investors have preferred, when it comes to e-commerce, companies that are marketplaces,” he said. “As a result, Etsy ought to receive a higher valuation.”
