Market reports suggest that there were more than two billion websites online as of December 2017. The growth in the websites is attributed to the increasing presence of Content Management Systems (CMS) that allow people and organizations to build websites easily without having to truly code. The CMS market is dominated by Wordpress, which accounts for nearly 60% of the sites published. Joomla is a distant second with under 7% market share. But there are several other smaller players that are delivering robust growth within the space. One such player is New York-based Squarespace.
Squarespace was founded in 2003 in the dorm room of Anthony Casalena at the University of Maryland. The idea behind setting up Squarespace came to Anthony when he designed a website for himself and realized that tools that he used to edit the website could come in handy for several others as well. Anthony raised seed funding from his father and invested in servers to set up Squarespace.
Squarespace helps businesses and individuals create and maintain their websites. From a dorm room, the company has grown to a team of nearly 800 employees who are supporting millions of websites.
Squarespace earns revenues through a monthly subscription fee for hosting and web publishing services. For individuals, the company charges $12 per month and grants the user access to computer and mobile enabled web pages, galleries, and blogs. Users can also see their website metrics and access a 24×7 support for their issues. For businesses, Squarespace’s product is priced at $18 per month and it gets them Google email, integrated e-commerce, and several premium features such as a mobile information bar, announcement blocks, and several integration capabilities.
The company’s product has seen rapid adoption. While it is no way close to WordPress, the service accounts for 1.5% of the websites published as of December 2017 with nearly 9,800 of them ranking amongst the top one million. Some of its customers include names like Lyft and Wired.
Squarespace has seen strong revenues since it began operations. Within the first year of business, the company had already earned $50,000 in revenues. By 2012, it was tracking to $17 million in revenues. In 2016, its revenues are estimated to have grown 50% to $300 million. It was looking to earn $424 million in revenues last year. While it does not disclose detailed financials, the company is expected to be profitable.
It has been venture funded so far with $278.5 million in funding from Accel Partners, Index Ventures, and General Atlantic. Its last round of funding was held in December 2017 when it raised $200 million from its existing investors at a valuation of $1.7 billion. In an earlier round that was held in July 2010, Squarespace was valued at $100 million.
Squarespace’s IPO Prospects
Many were expecting Squarespace to go public. But instead of listing at the stock markets, the company floated another investment round last year, and allowed early employees and investors to cash in. Anthony believes that there is a lot to do before he can take the company public and right now it is focusing on helping its customers sell products through its sites. Over 100,000 customers out of its 2 million paying subscriber base are already leveraging its commerce tools. Additionally, the company is focusing on driving international growth. Currently, nearly 30% of its revenues comes from markets outside of the US. It wants to increase that share and is focusing on France and Germany to drive growth.
For now, Squarespace is in no rush to list as it clearly has the funding, valuation, and the tools to remain independent and away from the glare of the public market.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns.