Squarespace Shares Fall In Direct Listing Debut

Website builder Squarespace began trading on Wednesday, with its stock closing at $43.31 — 13 percent below its reference price.

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Tech stocks in particular have been getting hammered lately amid investor concerns around rising inflation. That likely contributed to Squarespace opening below its reference price on its first day of trading (it opened at $48) and closing even lower after the stock price slipped throughout the day.

The New York-based company, known for helping users build sleek websites through a streamlined process, opted to go public through a direct listing, following companies like Roblox and Coinbase this year. Squarespace said in January that it’d filed an S-1 registration statement with the SEC confidentially, before publicly filing last month. The company reported $621 million in revenue for 2020, up 28 percent from the year prior. 

While Squarespace is best known for its website templates, it also offers hosting services and ways to conduct e-commerce transactions.

Squarespace launched publicly in 2004, and raised more than $578 million in funding as a private company. Besides the executive team, the largest shareholders in the company are VC firms General Atlantic, Index Ventures, and Accel, with holdings as follows:

General Atlantic

Class A Common Stock: 22,361,073 (31.4 percent)

Class B Common Stock: 4,958,345 (7.7 percent)

Value of Class A Shares at Opening Price: $1 billion

General Atlantic led Squarespace’s $40 million Series B in April 2014, receiving the largest percentage of Class A shares, at 31.4 percent. Of the other nonexecutive stockholders that hold greater than 5 percent, General Atlantic is the only one to hold Class B shares, and also has the greatest share of voting power. The value of the firm’s Class A shares comes out to more than $1 billion at the $48 opening price.

Index Ventures

Class A Common Stock: 19,460,619 (31.4 percent)

Class B Common Stock: 0

Value of Stake at Opening Price: $934 million 

Index Ventures co-led Squarespace’s $38.5 million Series A in July 2010. While the firm doesn’t hold any shares of Class B common stock, per the S-1 filing, it holds 31.4 percent of the Class A shares, bringing the value of its stake to $934 million at Squarespace’s opening price of $48.

Accel

Class A Common Stock: 15,514,196 (21.7 percent)

Class B Common Stock: 0 

Value of Stake at Opening Price: $744 million

Accel co-led the company’s Series A in 2010 alongside Index Ventures. Of the three largest investors in the company, Accel’s stake is the smallest, coming out to about $744 million at the opening price of $48.

Illustration: Li-Anne Dias