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The Boston Globe

Business

Wayfair shows more momentum amid IPO talk

Another sign from Wayfair that 2014 is shaping up to be a banner year: The company Friday reported raising $157 million in venture capital funding, further fueling talk that it will be one of the biggest initial public offerings among Boston companies this season.

The new funding, led by T. Rowe Price Associates Inc., pushes Wayfair’s venture capital total to $358 million in under three years and comes on the heels of news that Wayfair has hired several Wall Street investment banks to lead its IPO later this spring.

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Founded by Cornell graduates Niraj Shah and Steve Conine more than a decade ago, Wayfair is an online marketplace for furniture and home goods. It recently reported revenues of $915 million for 2013, a 55 percent increase over the previous year, and also said it would be moving into a much larger space at the Offices at Copley Place.

Though its profile within Boston’s tech community is already pretty high, Wayfair has begun advertising on billboards over Interstate 93 and the Massachusetts Turnpike.

The company declined to comment, issuing only a statement in which Shah, the chief executive, said, “Wayfair is heading into 2014 with tremendous momentum and growth as more and more shoppers opt for one of our exceptional e-commerce shopping experiences.”

Wayfair is frequently compared with Zulily, an online shopping site that offers daily deals on clothes and goods for parents and small children. Zulily went public in November at $22 a share, and its stock closed Friday at a hefty $58.47.

Since it went public, many have watched Zulily’s progress as a barometer for the prospects of other initial public offerings from online retailers, Wayfair in particular.

For example, Wayfair by some estimates is valued at around $2 billion, according to The Wall Street Journal; Zulily, by comparison, had a market capitalization of $4.6 billion at the end of its first day of trading. Zulily’s revenues in 2013 were $696 million, but that was 110 percent higher than the previous year.

Kathleen Smith of Renaissance Capital, a Connecticut investment firm that specializes in the IPO market, said that a new round of funding for Wayfair is “a smart step for the company” and will probably improve its appeal as a financial investment when it goes public.

But Smith cautioned that “while the IPO market has been very strong lately . . . the IPO window is not always open.”

She noted in the weeks after Facebook went public in 2012 the IPO market went quiet.

Among the investors in this latest round is Julie M.B. Bradley, the chief financial officer for TripAdvisor and a member of Wayfair’s board.

Previous venture backers of Wayfair include Boston heavyweights Battery Ventures, Spark Capital, Great Hill Partners, and HarbourVest Partners.

Dennis Keohane can be reached at Dennis@betaboston.com. Follow him at @DBKeohane and at BetaBoston.com.
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