This morning, Wayfair, the Boston-based online furniture retailer, announced that it has added 170,000 square feet to its upcoming lease in The Offices at Copley Place.
The additional office space more than doubles the original square footage Wayfair anticipated needing for its expected move in June. Last spring, the company announced that it was leasing 105,000 square feet from Simon Property Group, Inc., for a summer 2014 move out of the tower at 177 Huntington Avenue, a space that is part of the Christian Science complex.
Wayfair’s new office space will now be 275,000 square feet, about three times the size of its current headquarters. The deal also includes possibilities for further expansion as the company continues its rapid growth. The new space is needed as the company is scaling at a faster rate than expected.
Wayfair is one of the companies that everyone is looking to in eager anticipation of an IPO this spring. Recently, The Wall Street Journal reported that the company had enlisted Goldman Sachs, Bank of America, Citigroup, and Allen & Co., as underwriters for the company’s expected public offering. (The bank group Wayfair expects to use is the same as that used by Zulily, a company with a similar e-commerce profile to Wayfair.)
The excitement over Wayfair’s IPO seems to exceed that of Care.com, a Boston-based services platform which went public in January, as well as other possible IPO candidates, including HubSpot, Acquia, and maybe even DataXu. The reason is that Wayfair, which made a risky move by rebranding from CSN Stores in 2011, has quietly built a brand that earned $915 million in revenue in 2013.
Compare that number to Zulily, which is on fire on Wall Street right now. On the day of its IPO, Zulily ended the day with a estimated $4.6 billion market capitalization. On Friday, Yahoo! Finance reported that the company’s stock had risen 60% in the past week on great Q4 numbers. They estimated the company’s new market cap close to $7 billion. Today, MarketWatch has the company’s market cap in the $8.5 billion range.
Zulily’s sales for 2013? Over $695 million, which is impressive for an e-commerce company. With its Q1 numbers expected to be in the range of $225M to $235M, Zulily expects a monster 2014. With those type of expectations, Zulily should have a bigger 2014 than Wayfair’s 2013. However, that doesn’t mean that Zulily will outperform Wayfair this year.
Which is why Wayfair’s IPO has so much interest. Not only could it be an important bellwether for e-commerce, but it could be the big win that the Boston tech sector has been anticipating for awhile.
If Wayfair’s IPO goes as expected, Boston would not only have a new “pillar” company it could point to, but a new wave of suddenly very wealthy angel investors funding more Boston startups.
Back to Wayfair’s expected move to what will be a larger than anticipated space in Copley in June.
Wayfair is a model company in almost every way, but one area where they get some criticism is in how visible they are in the Boston tech community.
Like most of Boston’s successful “startups,” including RunKeeper, Akamai, Acquia, et. al., Wayfair has kept a low profile as it has built a wildly successful company.
While much of that is a reflection of founder’s Niraj Shah’s and Steve Conine’s work ethics and personalities, the company has come out of its shell a bit more recently with the risky move to rebrand as Wayfair and bit more active presence in the community.
But Wayfair may still be acting a bit too conservatively.
While the move to The Offices at Copley is great for Wayfair, the company had an opportunity to become a more visible presence in the city with its relocation. As it is, the company is moving into office space in a multi-purpose downtown building and will likely have little to no public branding. The company could have relocated to a space where they could have created their own brand identity and have a more public presence.
While getting space in the Seaport and throwing a big Wayfair logo on top of a building like Vertex was an unlikely scenario; or a move to the suburbs, away from the Back Bay homes of Shah and Conine, would be crazy; a LogMeIn type of move, to a growing tech neighborhood like Fort Point Channel and with some exterior branding (The sign outside of LogMeIn is one of the few example’s of a local tech startup marking its territory) could have had an impact on how folks in Boston connect to Wayfair.
Wayfair’s “head-down” approach has obviously worked out tremendously for the company, which could have one of the biggest year’s of any Boston tech company in recent memory. Additionally, the new space is going to be awesome if their current office design and positive vibe is any indication.
It just would have been nice to add a little more swagger to the Boston tech ecosystem.