An expected wave of initial public stock offerings by Massachusetts technology companies appears to be gathering speed with reports this week that online homegoods retailer Wayfair LLC has enlisted several banks to serve as underwriters for its launch on Wall Street.
Boston-based Wayfair would be the second local tech firm to go public this year, following Care.com in January, with more likely on its heels. An unofficial IPO watch list includes online marketing firm HubSpot Inc., software company Acquia Inc., cybersecurity firm Veracode Inc., and online urban streetwear retailer Karmaloop Inc.
Wayfair chief executive Niraj Shah would not comment on the company’s plans; because its revenue in 2013 was less than $1 billion, Wayfair can file papers for an IPO with the Securities and Exchange Commission confidentially.
But Shah did acknowledge that the recent success of Care.com — an online marketplace for personal care services that raised $91 million in its IPO, despite not having turned a profit in eight years — was empowering for the local tech community.
“Obviously, we were rooting for another Boston tech company, and we’re glad to see them do well,” Shah said. “Boston doesn’t get enough accolades for the quality we have here.”
Wayfair has made known its desire to eventually go public for more than a year, though executives had said previously they might hold off until 2015. The decision to enlist underwriters, first reported by The Wall Street Journal, suggests the timeline could be accelerating.
In November, the company hired former Warner Music Group vice chairman Michael Fleisher as chief financial officer in a move that was widely viewed as preparation for an IPO. Fleisher led Warner into the stock market in 2005 and helped technology research firm Gartner Inc. launch an IPO in 1993.
‘Right now the market is pretty receptive to tech companies.’ANAND SANWAL, chief executive, CB Insights
Until Care.com went public last month, it had been almost two years since a Massachusetts software firm made an initial public stock offering. Whether Wayfair follows first or is leapfrogged by another company, the wait is likely to be much shorter this time.
A resurgent stock market and high valuations of promising tech companies — even those that are not yet profitable — make going public an appealing option, said Anand Sanwal, chief executive of CB Insights, a New York firm that tracks investment in startups. Just this week, Facebook took the breath away of much of the business world with its $19 billion acquisition of mobile messaging startup WhatsApp, which had 2013 revenues of just $20 million.
“Right now the market is pretty receptive to tech companies,” Sanwal said. “There’s a backlog of companies that were mature enough to IPO in the last few years but have been waiting for the sentiment to be good — like it is now.”
Wayfair was founded in 2002 but wasn’t well known among consumers because for years it sold furniture, lighting, and other home goods on more than 200 niche websites. In 2012, not long after dropping the name CSN Stores and adopting the Wayfair moniker, the company consolidated most of its products on a single site.
In January, it reported 2013 revenues of $915 million, a 55 percent increase over the previous year.Callum Borchers can be reached at firstname.lastname@example.org. Follow him on Twitter @callumborchers.