The New York Stock Exchange welcomes Squarespace, Inc. ( NYSE : SQSP ), on May 19, 2021, in celebration of its Direct Listing. new york stock exchange By 2010, Anthony Casalena was seven years into bootstrapping his start-up Squarespace, which he ‘d grown from a dormitory room project at the University of Maryland into a commercial enterprise with $ 10 million in gross. That ‘s when Getty Images approached him to see if he wanted to sell. Casalena considered the offer long and hard, but he did n’t want to give up control. rather, he opted to stay independent and bring in outside investors for the foremost time, allowing him to accelerate rent and product development and besides sell some of his banal. He did n’t know it at the time, but in raising a $ 38.5 million finance attack, Casalena was making a billion-dollar decision for himself and a highly lucrative one for venture firms Index Ventures and Accel Partners. Squarespace, which sells tools for easy web site universe and publish, debuted on the New York Stock Exchange on Wednesday with a market measure of $ 6.6 billion. Casalena, the company ‘s biggest stakeholder, owns shares worth $ 2.4 billion, while Index and Accel control holdings valued at $ 944 million and $ 750 million, respectively. Because Squarespace went populace through a target list preferably than raising capital in an IPO, insiders can start selling right away and do n’t have to wait for a lock-up exhalation. Their stakes listed above include some sales that they registered to trade right away, including 6.2 million registered by Casalena. “ A direct list fit for us because Squarespace has been a profitable company for a total of years and we do n’t need to raise money in this consequence, ” Casalena told CNBC ‘s “ Squawk Box ” on Wednesday. “ Our think was pursue the direct number, hold people the option to buy if they want to buy, sell if they want to sell. What ‘s great about the direct list is no one ‘s suffer unnecessary dilution today. ” Squarespace had a rough in debut, opening at $ 48, below its $ 50 reference book price on the NYSE. In March, the caller raised a private attack at $ 68.42 a share, valuing the business at $ 10 billion. Stocks were broadly down on Wednesday, and cloud software stocks have been badly underperforming the grocery store this class, as investors rotate out of hazard. still, at 38 years old, Casalena is the latest technical school entrepreneur to join the billionaire ranks as high-growth companies that had filled up the IPO pipeline in holocene years hit the marketplace with big valuations. The founders of Affirm, Roblox, Coinbase, Bumble, UiPath and AppLovin have all entered the three-comma club this year. Squarespace competes most directly with companies such as Wix, Automattic ‘s WordPress, Square ‘s Weebly and Shopify. The company has 3.7 million subscribers. gross final year rose 28 % to $ 621.1 million. net income narrowed to $ 30.6 million from $ 58.2 million a year early, as the company boosted outgo on sales and commercialize by 40 % “ in light of the accelerating trends in the sum of time and money consumers are spending on-line during the COVID-19 pandemic, ” Squarespace said in its course catalog .
From college to CEO
The Squarespace fib began in 2003 at a scholar apartment complex called South Campus Commons in College Park, Maryland. While in school, Casalena was looking for a web site that enabled easy on-line publication, but he found the existing services such as Blogger insufficient. He coded together his own and soon found that person wanted to pay him to use it. “ The web log was the anchor, but it was always about doing more with it, ” Casalena told the NPR podcast How I Built This with Guy Raz, in 2019. Casalena finally persuaded his dad to give him $ 30,000 so he could buy a couple of servers and firm them in a datum center in New York. After college, he drove to Manhattan and took up residence in a fourth-floor walkup apartment that he ‘d found on Craigslist. Over the adjacent few years, Squarespace grew steadily with a skeleton crew and fiddling structure. In 2007, Casalena started trying to professionalize operations and even hired a more season administrator as CEO. He realized that approach was n’t going to work. “ I learned a lot of lessons the hard direction, by literally making, I think, pretty much every possible mistake one can make, ” Casalena told Raz. “ I did n’t know what I was getting into. ” interim, Accel had been keeping a close eye on Casalena. The tauten, which was best known for an early bet on Facebook, had begun looking for internet and software businesses across the earth that were gaining significant grip without venture fund. Someday, Accel ‘s think went, these founders may want to raise money to make an learning or seek fund to hire some more expensive endowment.
“ In those situations, we want to do our best to build a relationship and try to be there when possibly they evolve their think, ” Andrew Braccia, the Accel partner who ended up leading the Squarespace investment, said in an interview. Accel used a similar approach to invest in Atlassian, an australian software company whose products were popular with developers, and Qualtrics, a family-run swarm software business in Utah. Atlassian now has a market cap of $ 54 billion, and Qualtrics was acquired by SAP in 2018 for $ 8 billion, before spinning out this year into a publicly traded company deserving $ 17 billion. A ten ago Accel ‘s increase investing strategy was fair a thesis, but Braccia said it ‘s immediately clear that “ you can create venture-style returns out of later-stage bootstrapped businesses. ” Braccia, who ‘s based in Silicon Valley, flew out to meet Casalena in 2010. He and boyfriend Accel partner Ryan Sweeney had breakfast with the Squarespace founder at Mercer Kitchen downtown and then spent a couple hours at the Squarespace agency, where Casalena walked them through his vision for the future iteration of the company ‘s publish system. “ I remember watching Anthony take us through the newly translation of his product, ” Braccia said. “ He was maniacally focused on the smallest of details. ”
A lucky eruption
Around the like time, in July 2010, Index ‘s Dominique Vidal was in New York to meet Casalena. He was introduced by Jonathan Klein, Getty ‘s chief executive officer at the time, and flew in from London to try to land the batch. Vidal, who was besides friends with Braccia from their pre-venture days working at Yahoo, ended up cling in New York for much longer than expected because of the volcanic eruption in Iceland that spewed ash across much of Europe and disrupted international travel. Vidal was n’t available for an consultation, but Nina Achadjian, another partner at Index, relayed the report to CNBC on his behalf. “ Dom ‘s flight was canceled, and he hung out with Anthony a short ton more, ” Achadjian said. “ The more fourth dimension he spent with Anthony, the more he was blown off. ” Casalena told Raz on his podcast that he was n’t certain how Index and Accel heard that Getty had made an offer, but somehow they “ caught wind of this, ” he said. They had a counterproposal for him. They said, “ You do n’t have to do that. You do n’t have to sell it all if you want some fluidity, ” Casalena told Raz. “ Why do n’t you accept an investment from us ? We ‘ll put some money into the party. You can sell some of your shares to us. You can keep running it. We ‘ll put a board in target, we ‘ll help you recruit executives and all that. I liked that. ” Vidal and Klein joined the board along with Braccia. Casalena resumed as CEO. Squarespace went on to raise another $ 40 million in 2014 in a round led by General Atlantic, which is nowadays the biggest outside investor, with a $ 1.3 billion stake. The caller raised $ 200 million at a $ 1.7 billion evaluation in 2017 and $ 300 million in March ahead of the lead listing. The New York Stock Exchange welcomes Squarespace, Inc. ( NYSE : SQSP ), on May 19, 2021, in celebration of its Direct Listing. new york stock exchange By waiting so long before raising his first external capital, Casalena maintained a bigger stake than many founders of venture-backed companies. He besides has an outsize come of control condition over decision-making. Squarespace has a dual-class vote structure, and Casalena owns most of the Class B shares, giving him see of approximately 68 % of the total vote exponent. While that social organization has become coarse in Silicon Valley among founder-led companies, critics say it creates hapless systems for accountability and limits the ability for the board and shareholders to take action when necessity. IPO research tauten New Constructs, in a report this workweek, said the bodied structure is one of the reasons that investors should be cautious. The firm said Squarespace is worth “ at best $ 4.2 billion, ” in depart because it operates in a highly competitive market with cheaper alternatives. The consolidation of power does n’t help. “ A risk of investing in Squarespace ‘s target number, and early late IPOs, is the fact that the shares sold put up short to no say over bodied government, ” the firm wrote. WATCH: Squarespace ad distinguishes between two worlds