Public Markets

Squarespace Files S-1, Revealing Strong Subscription Increases And A Growing Commerce Business

Website builder Squarespace publicly filed its S-1 with the Securities and Exchange Commission on Friday as it prepares to go public through a direct listing.

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Known for being a relatively easy way to build your own website, New York-based Squarespace’s sleek designs give individuals and businesses the tools to quickly customize templates, host their website, and conduct e-commerce transactions. The company said in January that it filed an S-1 document confidentially with the SEC.

Squarespace launched publicly in 2004 before raising its first round of funding from investors including Accel and Index Ventures. As a private company, Squarespace raised more than $578 million in funding. Among the largest shareholders in the company are Accel, Index and General Atlantic.

The company reported $621 million in revenue in 2020, up 28 percent from around $485 million in 2019. About 94 percent of its revenue came from subscriptions, according to the company, which reported 3.7 million unique subscriptions. Its commerce revenue came out to about $143 million, representing growth of 78 percent year over year. Squarespace is profitable, generating net income of $30.5 million in 2020, down from $58.1 million last year.

One notable risk factor mentioned is Squarespace’s reliance on a single supplier to process payments from customers: Stripe

“The success of our platform depends, in part, on our ability to integrate and offer third-party services to our customers. In particular, we use Stripe Inc. (“Stripe”) to process our transactions with our customers and we offer payment processing integrations for our customers to charge their users through Stripe, PayPal Holdings, Inc. (“PayPal”) and Square, Inc. (“Square”),” the company wrote. “While we offer our customers access to three payment processing integrations through which to charge their users, disruptions or problems with the relevant services provided by any of these companies could have an adverse effect on our reputation, business, financial condition and results of operations.”

Squarespace is going public through a direct listing on the New York Stock Exchange under the ticker SQSP. It will be the third major tech or tech-ish direct listing of the year, following gaming company Roblox and cryptocurrency exchange platform Coinbase.

Illustration: Li-Anne Dias

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