Wayfair, a Boston-based online home furnishings retailer, went public Thursday and now has a market capitalization of nearly $3 billion.
David Harris
Tech Editor- Boston Business Journal
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I’ve been hearing this theme since I started covering tech less than a year ago: Greater Boston doesn’t produce enough consumer-oriented tech companies.
It’s an old theme in a region that’s known in the tech world for producing great companies focused on technologies that help businesses function better. Think Hopkinton-based storage company EMC, cybersecurity firm Bit9, Cambridge software company Pegasystems or marketing software firm HubSpot (HubSpot is expected to go public next week).
Think also about Facebook, which was born at Harvard and then moved its operations to California (there are indeed other examples of tech companies migrating to the West Coast).
And, yes, the data seems to back up most of the thinking about tech in Boston. According to market research firm CB Insights, consumer tech-based companies aren’t getting the majority of funding. In fact, CB Insights recently reported that business-to-business companies have received 84 percent, or $3.4 billion, of all venture funding placed among Boston-area tech firms in the past seven years.
But that old theme was challenged today with the initial public offering of Wayfair (NYSE: W), the online home furnishings business with 1,000 employees in its new Copley Place headquarters. Shares of the company rose by 30 percent on the first day of trading to $37.72. The company, now with a market capitalization of about $3 billion, generated $915 million in revenue last year (although it lost $15.5 million during the same time period).
Wayfair’s IPO is happening at an exciting time in Boston’s tech history. Kayak co-founder Paul English’s startup incubator, Blade, just opened not too long ago with the mission of nurturing the next big consumer tech company. Facebook, Twitter, Amazon and Google have all expanded their presence in Cambridge in recent years. And Gazelle is building a popular consumer electronics trade-in site that reportedly generated $100 million in revenue last year. Other examples of local success stories in this space: Newton-based TripAdvisor (Nasdaq: TRIP), whose stock has risen 215 percent since it went public in 2011, and Boston-based car-sharing service Zipcar, which was sold to Avis for $500 million last year.
My safe prediction is that Wayfair’s IPO symbolizes a new beginning for consumer tech in Greater Boston. And it’s a step in the right direction.
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