Etsy, the anti-eBay shopping site for handcrafted goods, raised $27 million in a series C round. It previously raised a total of $4.6 million from Union Square Ventures and angels Caterina Fake, Stewart Butterfield, Joshua Schachter, and Albert Wenger. Union Square Ventures invested again in this round, as did new investor Acel Partners. Accel partner Jim Breyer will take a seat on Etsy’s board (he is also a board member of Facebook). Fake, a founder of Flickr with her husband Butterfield, and Union Square’s Fred Wilson are existing board members. Since launching in June, 2005, Etsy now has 650,000 members, 120,000 of which are craft sellers, in 127 different countries. The Brooklyn-based startup employs 50 people.
Etsy founder Rob Kalin says in a blog post:
This means that we now have the resources to extend Etsy’s reach in this world, to enable so many more people to make a living making things. We want Etsy to exist for hundreds of years. Our goal is for Etsy to be an independent, publicly traded company, focused on all things handmade.
He says that Etsy is “almost break-even” on profits, but he plans on using the money to:
—Buy $5 million worth of hardware and hosting over the next two years.
—Support more currencies and languages other than the U.S. Dollar and English.
—Fix the checkout system (there is none now, every buyer has to pay every seller on an individual basis. There is no Etsy payment system that works across all sellers).
—Fix search.
—Provide a cushion in case of a recession.
—Offer customer service
—Provide competitive wages and take care of his employees.
In other words, Etsy is growing up. And it needs cash to do so. The site reached 1 million unique visitors in the U.S. last month, according to comScore (1.6 million worldwide), doubling from last April.
Update: the word on the street is that etsy was valued at $90 million pre money in this round. wow.
congrats rob and the etsy crew!
27 million down the drain
Good for them.
great bit of news for a great business. They’ve covered some really important development points in the above linked article, I’d wish them luck but I doubt they need it… anyone have any thoughts on what the most important ones are?
This must be the feel good story of the day. Congrats Etsy!!
Etsy is a great idea, but apparently the business is run in a, shall we say, haphazard manner according to my wife, who spends about half of her day on the website.
I hope it’s not down the drain per comment #2, but unless some changes in their business plan and practices occur the poster may be on the mark.
Very good news! Good luck Etsy.
@Ed (comment 4): The most important of the list: Fix search. Nothing else matters if buyers can’t find what they’re looking for.
Why is comscore chart says 1,000 instead of 1m?
Erick writes “The site reached 1 million unique visitors” I swear there’s nothing wrong with our human eyes. Our eyes don’t play jokes. Erick… How thick is your glasses?
You could write “Th site just blast off to one thousand unique vistors during 12 months.” Or you can ask Comscore to change 1m on chart.
I don’t blame you erick… Comscore chart is poorly design.
We are Just look for truth. This Chart looks like:
George W.Bush vs. Al Gore
what a waste of money.
So they’re hoping for IPO rather than acquisition. That might be tough, but at least they seem committed to it.
The space they’re in requires a lot of specialized knowledge that doesn’t dwell in the cubicles of eBay or Amazon. It’s a good thing. We need more of these and fewer of the former.
@6: No serious investor would get on board and let the business run in a “haphazard” way. I’m sure there will be changes …
That site prints money. It may never be ebay big but it will deliver $$$. Plus the folks who run it are pretty cool to boot
Etsy is a very addictive site and they defiantly need to fix their search function and checkout system. Glad they are getting more funding!
Here’s nice chart that prints 1m
http://siteanal....com/?metric=uv
Hmm. The Etsy Color Page was #2 on the “10 Worst Uses of Web Site Navigation for 2007″ http://www.webp...07-group-2.html
27 mil? do they really need that much?
if they ever make $, now should be it, but if they still need more $ to make $, it won’t happen.
Yahoo should have acquired this a while ago, focused on creating this huge market with their tools, and cleaned up the process. Now it looks like a great thing that Amazon should acquire. Etsy rocks, but it has some definite issues it can work on to make life easier for its sellers (and buyers). I love what this is doing to world sellers.
damn, one of my ideas got killed.
Now, I will just throw away artisanbox.com domain name that I’ve bought to build a shopping site for artisan works from around the world – the stuff Etsy does.
The site however has a HUGE room for improvement. It looks cheap, very user-unfriendly and can be made much cooler… Let Etsy guys put their imagination to work
Or hire me and I’ll share my visions for this stuff with them 
DD
To the naysayers: if done properly, Etsy could reach in excess of 100 mln a year in revenue – I’ve done my homework and crunched some numbers while researching this stuff for my idea. The market for nice artisan work is great, the buyers of this stuff usually earn a lot, so that don’t worry about Etsy – it will carve its niche easily and will do very well…
Too bad I didn’t start it earlier…
Congrats to Etsy!
care to share your marketing research and #’s with me? ::)
AN out of the box software package that will take a fortune to upgrade and fix. Just like the thousands of other auction sites that have tried to unseat ebay and lost.
http://www.kenz...om/auctions.htm
A HUGE WASTE OF VC MONEY
@19…
yea, google, facebook, microsoft, apple…all did the same with my ideas.
Ideas are just ideas…getting your idea off the ground is different. Sounds like you just bought a domain and had no direction.
Also, as far as fixing the search….how do people know what they are looking for if the stuff is a bunch of one offs?
@21: I am trying to get out of the “salaried man” category. Artisan shopping site was just another idea, so Etsy did not killed my “dreams” cause guess what: I have many and much better ones
Right now, for example, I am getting one of my ideas off the ground – the site is being developed and will be launched in 2-3 months.
As for my idea about artisan work: I had a very good direction (and still have it – who knows, if Etsy will not improve their site I may become their competitor) and an execution plan. I just had to go with a less expensive project and artisanbox.com requires more money than I can afford to invest right now…
But kudos to Etsy – they did something and will grow it the best way they can. Good example to follow.
why are you letting a crappy functioning site kill your dream? Nothing is wrong with a little bit of competition especially when you know you can do it much better.
Hell its even better for you, because you can have a point of reference to improve on. And that site has already created the market which you can cannibalize on
Google took on Yahoo and won. And even if you fail and your site is just another mediocre copy, you’ll probably still make more money than you do in your 9 to 5 job, because your site will be the alternative to them. And when you have only 2 choices, its pretty hard for one to get 99% and the small fish 1%. This isn’t a car classifieds site which there are 5,000 out there, this is a very specific niche, and if its just you and them, that 1% of 100mm/yr market would give you plenty of money to live on as long as you keep your fixed costs low
Andrew, thanks for the good words and encouragement. You made me want to do it sooner, however I have a couple of things to do before I get to this type of business:
1. I have to change (disrupt? innovate?) the way news are aggregated – direction is defined, general site structure and functionality is finalized, a good domain name is purchased and I just need the money. Google news is strong, but hard to use, Digg looks better but I would not get my news from there cause the news do not cover everything I want to read about, Yahoo, MSN and others are ok, but again you cannot get lots of news from them without many clicks. I do not write about the others, smaller ones…
2. I have to change the way kids are taught school material because this system is definitely faulty. Again, direction, concept, site structure, domain name are ready. The software requirements are almost ready. Add here my teaching assistant experience in stat for undergrads and current tutoring practice and you get the picture. There, I’ll need even more money than in point 2
So, now I am trying to get something off the ground to have a small war chest to not have to go to work every morning, but to concentrate on my ideas and bring them to life.
artisanbox.com was intended mostly for leisure and pleasure, not for making the money of my life. Let’s see fhow the other guys will do it, and I’ll decide whether to compete with them or not.
They took too much money. Yes, it is waste of VC money. If they decide to compete small startups. Watch they’ll kill $27 million dollar company.
Anyone can make that website less than $27 million.
Remember Boardcast.com ??
Oh man, Mark Cuban & Boardcast.com couldn’t beat one billion dollar Youtube. Yahoo waste money buying Boardcast.com
i wonder if they could have continued on course without the 27m. like, its the andreessen style to stuff yourself with cash whenever u can get it but is this really the way to go?
for all the haters posting to this thread i would love for you to link to your exceptionaly designed sites so we can check them out.
I think this is great news for many sellers that make and sell thier own items……especially on the heels of that joke of an announcement from ebay on thier new fee structure. This is a niche market that Etsy concentrated on and should become successful at. Now if some VC’s looked into other’s such as blujay.com and gorage.com, there could be some real nice alternatives for all sellers.
I love how “fix search” is one of the action items, like that couldn’t be achieved without $27 million in VC funding.
Honestly, all it takes is to hire a coder for a few thousand dollars to hook up Lucene or something. There are already easy to use, enterprise-ready search engine solutions out there that you can just slot into your site.
Yes but will it float? Etsy has a great site that feels very home grown. They even swear to never send a link by email. How unique is that?
Why pay Etsy or any other site to sell your stuff? Why not put it on your own blog and have people find you through search? If it’s any good, people will find you and your stuff will sell. I don’t buy the PR that comes out of the over staffed Etsy head office about saving the planet by buying handmade. How will taking locally made goods that used to be sold locally and selling them with tons of transport costs save the planet? Etsytools is worth a look, a site run by disgruntled Etsy sellers (there are lots of them). It tries to give sellers useful stats but was having trouble with data feeds being turned off last time I looked. Surely not the big hearted, altruistic folks at Etsy?
why so many flash neway
Congrats to the Etsy community. My mom sold her first few items not too long ago and she was ecstatic. To see her react like that made me happy too. Right then and there, I realized the power of Etsy. Here are my quick thoughts on it:
# It taps into a global community of passionate and highly skilled people.
# It also follows suit with the green movement, which is flourishing as we speak.
# It offers a lot of high quality, hand-made items that you can’t find anywhere else. Ipod socks, laptop cases, iphone cases, etc. are just the tip of the iceberg.
@9, my glasses would be pretty thick if I didn’t have high-index lenses.
But the chart clearly states “Total Unique Visitors (000).” That means you add three zeros to the numbers along the left (i.e., 1,000 = 1,000,000).
It is unclear what Jim Breyer was thinking here, but with that much money perhaps they can just build him a whole new marketplace just like the one he called for a few years ago in Business 2.0. This one doesn’t even come close to Jim’s old vision.
When you buy handmade goods, you do not always know what you are “searching” for, that is why etsy’s browsing tools are actually quite inspiring for a buyer. You stumble across things and the way the merchandise is displayed is WAY better than an ebay or many other sites. Everything is one off and therefore it is important that they continue to inspire, entice and grab a buyer’s attention.
I am excited about what they are going to do. I know this market well and they have an amazingly loyal and vocal community. I think the stats are interesting to see 1million in US but 1.6million world wide … there’s a lot of demand world wide if you get it right.
As someone who has an Etsy shop through which I’ve been able to sell many of my fine art prints, I am very happy to see this news!
How will taking locally made goods that used to be sold locally and selling them with tons of transport costs save the planet? Etsytools is worth a look, a site run by disgruntled Etsy sellers (there are lots of them).
I am excited about what they are going to do. I know this market well and they have an amazingly loyal and vocal community.
word around brooklyn is that they’re going to get into distributing music direct from artists. (i guess music qualifies as handmade–wonder if they’ll include electronica). not mentioned at all here, but it might help explain the bigger buck$. might set up an interesting showdown w/ lodwick’s new mysterious music endeavor.
it is such a disappointemnt to hear people are putting more money into this thing. i hope the boycotters will pipe up.
Congrz, hope he will more develop on next year!
Super
Great news. I hate ebay, now its just a big shopping plattform, not what it used to be in the beginning.