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Etsy: The “eBay of Handmade Goods” Worth $258 Million?

I was on an interesting conference call by Arcstone Equity Research & SharesPost in which they walked through the Web business Etsy.

New York-based Etsy is clearly a company on the move.

What Is Etsy?

The gist of Etsy’s business is that they’re a marketplace of hand-made goods (sort of eBay but primarily hand-made)…here’s a screen shot showing you some of the types of things they sell.

Disclaimers: The #s I mention are not from Etsy (they are all estimates based on Arcstone Equity Research & SharesPost)

Special thanks to Arcstone & SharesPost for all the graphs below:

Etsy’s Growing As Fast As Alibaba (But Not As Fast As eBay)

Etsy Business Model

  • Taking 3.5% of every sale and $.20 per item for a listing fee
  • Selling advertising (where they make about half their money)

Etsy Revenues, Profits, etc.

  • Estimated Valuation: $258 Million
  • Estimated Revenue
    • $16M in 2009 ($180 million in gross transaction values)
    • $30M in 2010 (on $335 million in gross transaction values)
    • Around $54M is projected in 2011
  • Profitable
  • 120 employees

Etsy’s Team

Top Officers

  • Robert Kalin
  • Chad Dickson (Yahoo)
  • Alan Freed (Google)

Outside Board Members

  • Jim Breyer
  • Fred Wilson
  • Caterina Fake

Etsy Competition

Some sites like Etsy are:

  • eBay (both through its own service and through acquisition of World of Good)
  • ArtFire
  • DaWanda (in England, France & Germany)
  • 1000 Markets
  • Bonanzle

Etsy Financing To Date

Other Etsy Highlights

  • 4.4 Million members
  • Hired a new COO (Alan Freed) from Google last year who has an emphasis on International
  • 2 million of 5 million products are Jewelry

Etsy’s Valuation

  • $258 Million (10X Annual Revenues (discounted 15% for lack of marketability))

My Take On Etsy

Fascinating Internet business on the move…a real niche dominator.

My best guess as to what will happen with Etsy: They will go public or be acquired by Amazon (Amazon loves to take out companies when they’re in the $100 million to $500 million per year revenue and if they own a niche).

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