Often, startups will issue a stuffy press release when announcing their venture rounds. But in the case of Etsy – an online platform to buy and sell handmade goods – there is actually a detailed blog post from the co-founder Robert Kalin, which even includes a video.
In all, the company raised $27 million in a venture round. The investors include Union Square Ventures, Hubert Burda Media and Accel Partners. In fact, Accel Partners' Jim Breyer is taking a board seat (keep in mind that he invested in Facebook in the early stages).
Kalin goes into lots of detail on the "use of proceeds." Etsy is going to invest about $5 million in hardware and servers, and there will be big improvements in the payment processing system, which is on par with Amazon.com's (NASDAQ: AMZN). Oh, and the company wants to provide Google-like (NASDAQ: GOOG) search functionality.
Even without such things, Etsy is getting lots of traction. The community has more than 650,000 members and there are more than 120,000 sellers.
And as seen with its funding press release – which is one of the most transparent I've ever seen -- Etsy certainly takes the concept of "community" very seriously.
Tom Taulli is the author of various books, including The Complete M&A Handbook. He also operates DealProfiles.com.
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Reader Comments (Page 1 of 1)
1-31-2008 @ 5:06PM
Beth M. said...
I agree that Etsy definitly has made great inroads, and is a nice place to shop. Some of their website designs are really great.
HOWEVER -
In my opinion, there will be two big obstacles to deal with for them, that hopefully they will address soon.
First - there is no way to customize your store front. (Note that offering even one thing for sale automatically gives an Etsy seller a storefront, so that should not be taken as seller commitment.) Everything looks the same. While that might be nice as far as server space is concerned, for a site dedicated to creative people selling their creations, it is very hard to have a vanilla store no matter what your preferences are.
Second, and most importantly - Etsy will need to set up some decency guidelines if they want to continue to grow their community. Right now, anything goes, and that includes "adult themed" materials, as long as it is "handmade". While trying to find something as generic as a cat toy, I got a visual assault of some not-so-nice handmade adult-themed item.
Am I a prude? No, but I do believe everything has its place, and Etsy is NOT the place for such items. If they truly want "community", I guess they are building it like a real life community - the good, the bad, the strange, the weird and the perverts.
I hope Etsy will take a good look at what its goals really truly are for growth, and decide what sort of standards it would like to set, other than just requiring items be handmade (or crafting supplies). I certainly could not allow someone under the age of 13 to look through the site, given that you never know what will pop up in the search results.
They need to either ban the adult-themed items entirely (aren't there enough sites that deal with soft porn already?), or make a separate category that does NOT appear in regular search results.
I for one think they have great potential, but don't plan to do much business with any place that doesn't separate (or deny entirely) sexually-themed items from everyday normal items.
Etsy, I hope you are listening, because that flaw alone could hinder your growth potential.