Chances are that if you’ve watched the Super Bowl or tuned in to just about any podcast in your lifetime, you’ve heard advertising for Squarespace. The company provides an all-in-one platform for website hosting and design, e-commerce, email management, and more. Despite competition from Wix.com, GoDaddy, and other website hosting platforms, Squarespace has grown massively from a dorm-room invention in 2004 to a giant worth well over $1 billion. Now it’s moving rapidly towards the Squarespace IPO date, having filed earlier in 2021 to go public.
The all-in-one website design and hosting service has been profitable for several years. Other “unicorn” startups (those with a valuation of $1 billion or more) tend to not yet be in cash-flow-positive territory.
In January, Squarespace filed confidential S-1 paperwork to go public in the near future. The Squarespace IPO will join Affirm and Poshmark in the 2021 lineup.
TL;DR
- Squarespace was founded in 2004 by a frustrated Anthony Casalena trying to build a website himself.
- Casalena borrowed $30,000 from his father as seed money for computer servers and ran the company solo for a few years before gradually building the Squarespace team in New York City.
- Revenue for the web and domain-hosting platform grew rapidly: Squarespace brought in $50,000 in its first year, $1 million by 2006, and $300 million by 2017.
- Squarespace raised venture capital funding in 2010, 2014, and 2017 for a total of nearly $279 million.
- Squarespace made its first company acquisitions in 2019, first with Acuity Scheduling and then with Unfold, a story-creation tool to cross multiple social media platforms. The financial terms of those transactions are not available to the public.
- In January 2021, the company filed confidentially to go public. Its filing didn’t specify whether Squarespace would pursue a traditional IPO or direct listing.
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A brief company history of Squarespace
Step into your time machine to return all the way back to 2004. While you’re reminiscing, try to remember just how different the Internet was (the very first YouTube video hadn’t even been uploaded yet).
At that time, website building was pretty much reserved for the chosen few who actually knew how to code. It wasn’t the norm to create your own website, whether for business or pleasure. Anthony Casalena was facing problems due to the lack of viable options to help him build his own website. Thus, Squarespace was born.
Casalena designed Squarespace so the average person, who had zero coding experience, could make their own website with simple, customizable templates. He also emphasized the potential for websites to be beautifully designed, not merely functional. This focus on the aesthetic side of site design is what Squarespace grew to be known for, distinguishing the company from competitors like GoDaddy.
Helping customers build their image is part of Squarespace’s mission. Casalena said in an interview with Entrepreneur:
“Building a product that works and looks beautiful is the baseline.”
He also noted the importance of “helping people present their ideas in a way that helps them look better or makes them feel more comfortable.”
One of its primary competitors is Wix.com Ltd., which became a publicly traded company in 2013, trading on the Nasdaq under the symbol WIX. Another major contender in the website and domain hosting space is GoDaddy Inc. trading under GDDY, which tends to appeal to a very different demographic than those who are drawn to Squarespace
Squarespace CEO Casalena has never wanted the company’s emphasis to be on hurtling towards an IPO for popularity’s sake. Rather, his focus has been on building a great company from the core.
Squarespace fundraising from founding to now
Squarespace fundraising began with a Series A round in 2010 and Series B round in 2014. The two laps, led in part by Accel and Index Ventures, raised a total of $78.5 million for the company. Then in 2017 came a $200 million secondary round of funding through General Atlantic, which resulted in a grand total of nearly $279 million for Squarespace’s fundraising to date.
As founder Casalena didn’t originally set out to start a business, he likely wasn’t thinking much about funding in the early days of Squarespace. Instead, he first worked to make the first version of Squarespace on his own while still a college student.
It wasn’t until a fellow student approached him with a small offer to pay him for use of the platform for his own website that the lightbulb went off in his head. Casalena noted in an interview with Inc:
“I quickly realized that the thing I was making for myself was something other people could use.”
The company’s very first fundraising round wasn’t by fancy venture capitalists. Casalena asked his father for a $30,000 loan. His father may or may not have been initially enthused about the proposition—ultimately, it’s up to us to imagine the scenario—but the result was a loan agreement so Casalena could buy two servers to house the Squarespace platform.
Ultimately, Casalena’s father was likely pleased with the ROI on his initial $30K investment, given that Squarespace made an estimated $50,000 in revenue in the first year. Rapid growth led to $300 million in revenue as of 2017.
Squarespace has conducted several major funding rounds since its inception. The latest major funding Casalena and the Squarespace team conducted was the aforementioned $200 million round from General Atlantic. In a secondary round, the external funding party purchases shares from existing shareholders. This is different from the strategy of the company issuing new equity.
In 2019, Squarespace was in talks with banks for up to a $400 million credit line. This move commonly precedes a company’s IPO, so the announcement of the Squarespace IPO date was almost inevitable. With the company being cash-flow positive, a Squarespace IPO seems like it could come soon.
Path to the Squarespace IPO
Squarespace has seen its business rise meteorically in its seventeen years of existence. It reaches many customers (over a million as of 2017) and has managed to scale growth through venture capital funding.
- In 2018, Squarespace launched its first email marketing product. Director of Product Natalie Gibralter said that email was the “first segue into a broader suite of marketing tools.” Integration of email marketing into the broader platform was intended to make Squarespace more of a comprehensive platform.
- In 2019 Squarespace bought Acuity Scheduling, a company that helps businesses manage and track their appointments online. It takes the guesswork and awkwardness out of scheduling appointments. Customers can organize calendars and availability and request information on clients at the time of booking.
- Later that same year, it acquired Unfold, an app that’s dubbed “a toolkit for storytellers.” It enables users to create stories using beautiful templates, which fits well with Squarespace’s usual distinction of creating beautiful websites. Unfold helps users to design their own professional-looking stories showcasing videos, photos, and text. Then these stories are easily shareable across multiple social media platforms.
- Recently, Squarespace brought on Marcela Martin as the new chief financial officer (CFO). Martin happens to have experience leading a public company, including Booking Holdings (BKNG). She is expected to help the company step up its financial reporting and forecasting.
Squarespace announced its confidential filing for an IPO in January, so the company might be hitting the public market within a few months. Once the Securities and Exchange Commission review is completed, the company’s registration will go into effect.
When is the Squarespace IPO date?
Squarespace’s confidential S-1 filing was announced January 27th, but the Squarespace IPO date is still unknown, and the possibility of a direct listing still exists. Squarespace noted in January that once the SEC review was done, the IPO plans would move forward.
Related: Direct listing vs IPO
What investors should know about the Squarespace IPO
Squarespace has a lot going for it as it approaches its IPO date. How can you evaluate what kind of shape the company is in before investing in the Squarespace IPO? As a private company, there are some factors you can’t fully examine until the company makes its market debut. However, there are some metrics to think about now:
- Profitability: Squarespace has positive cash flow, which is a good sign for potential investors.
- Revenue growth: The company’s annual revenue has grown consistently, reaching the $500 million mark in 2019.
- Executive leadership: Anthony Casalena has been the commander-in-chief from the start and has demonstrated a level-headed approach to building the business, noting in 2017: “Our mission here is to build a great company, not build towards a financial event.” Plus, the new CFO with public-company experience is a positive addition to executive leadership.
- Strength relative to competitors: For example, Wix.com’s revenue grew every year from 2013 to 2020. Squarespace has also shown impressive growth, and though its revenue was about half of Wix.com’s, it continues to distinguish itself with beautiful website design.
Bottom line
After 17 years in business, Squarespace shows no signs of slowing down or faltering. CEO Anthony Casalena continues to focus on building a lasting company. He is not only anticipating the milestone of the Squarespace IPO, but leading the company into the future—well beyond the Squarespace IPO date.