Squarespace Files to Go Public Via Direct Listing on NYSE

Website-hosting service Squarespace Inc. moved ahead with plans for a direct listing, joining a cadre of technology-oriented companies that didn’t need to raise money in a traditional initial public offering.

Squarespace spelled out its plans Friday in a filing in which it also disclosed details of its finances, including 28% growth in revenue last year. The filing confirms an earlier Bloomberg News report that Squarespace would follow a handful of other technology-based companies -- most recently cryptocurrency exchange Coinbase Global Inc. -- in picking a direct listing over an IPO.

Squarespace is planning to list its shares on the New York Stock Exchange, the choice for every major direct listing except Coinbase. While investment banks don’t underwrite offerings as they do in IPOs, they advise the company on the listing. Squarespace is working with with banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co., according to its filing.

In a direct listing, a company doesn’t raise fresh capital and existing investors can typically begin selling their shares on the first day of trading without the usual lockup period restrictions in an IPO. It can save on banking fees and the time spent on an investor roadshow.

Roblox Corp., Palantir Technologies Inc. and Asana Inc. also have gone public through direct listings in the past year. Earlier listings by Spotify Technology SA and Slack Technologies Inc. helped trail-blaze the alternate route to public equity markets.

Squarespace Backers

Squarespace Files to Go Public Via Direct Listing on NYSE

Led by founder and Chief Executive Officer Anthony Casalena, Squarespace competes against publicly traded rivals Wix.com Ltd. and GoDaddy Inc., among others. The New York-based company is is backed by investors including General Atlantic, Index Ventures and Accel.

“Squarespace has flourished by providing anyone a way to participate in the immense opportunity that comes from publishing and transacting on the internet,” Casalena said in a letter to investors included in the filing.

The company, which is expanding beyond web hosting to e-commerce, was valued at $10 billion in March in a funding round. It said in January that it had confidentially submitted a draft filing with the U.S. Securities and Exchange Commission.

Revenue Gains

Started in 2004, Squarespace had 3.7 million unique subscriptions as of Dec. 31, according to its filing.

Squarespace had a net income of about $31 million on revenue of $621 million last year, compared with $58 million on revenue of $485 million in 2019, according to its filing.

Its e-commerce business had 2020 revenue of $143 million, a 78% increase over the previous year, according to the filing. Its growth plans include expanding it customer base -- especially internationally -- and deepening its commerce offerings.

The company acquired restaurant-services provider Tock for more than $400 million in March. Squarespace paid a mix of cash and stock for the Chicago-based company, which provides technology for online reservations, takeout and other services. That followed 2019 deals for Unfold Creative LLC and Acuity Scheduling Inc.

Acquisition Strategy

Squarespace will pursue strategic acquisitions to accelerate key platform, product and marketing initiatives, it said its filing.

Casalena will continue to control the company through his 76% ownership of the company’s Class B shares, which carry 10 votes each compared with one each for the Class A shares that will be listed.

A date for the Squarespace’s trading debut hasn’t been disclosed. The company plans for its shares to trade under the symbol SQSP.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.