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Website builder Squarespace hits a $10B valuation (but we need to look at Wix)

Snacks / Thursday, March 18, 2021

This video is sponsored by... Squarespace has helped millions of non-coders build their own websites. It just raised $300M at an impressive $10B valuation — and though it was founded in 2003, its valuation has 5X’d in just the past three years. That's probably how it paid for its Dolly Parton Super Bowl commercial. In addition to hosting your sizzle reel website, Squarespace has also expanded to hosting online stores (great timing).

Double SUMO... Squarespace is still private, so regular investors are straight up missing out on its growth (it's a SUMO stock). But investors are SUMO'ing on its financials, too: Squarespace filed confidentially to go public in January, staying secretive with its numbers. Case in point: a one-paragraph post was all we got about the latest fundraise. While we barely know anything about Squarespace’s $$$, we do know about its publicly-traded rival Wix (also a website builder with ecommerce hosting):

  • $17B: Wix's market value. The stock has more than 3X’d in the past year as the world economy moved further online.
  • +30%: Wix's sales growth accelerated from 2019 to 2020, and it expects that momentum will carry through this year.
  • +107%: Wix's subscribers (who pay for monthly hosting) more than doubled from the end of 2019 to the end of 2020. But its yearly loss also doubled.

Lookout for the comp... to understand the private. With public companies, the market decides value. With private companies, it's a comparison game. To determine private company valuations, investors look at their publicly-traded competitors. They find similar companies in the same industry to gauge the private company's growth potential and value. As businesses moved online and people took on more side-gigs during the pandemic, Wix had its "most successful year in history." This gives us a hint as to what Squarespace might've experienced (despite its invisible numbers).

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