NEW YORK — If craft seller Etsy goes public this year, it will be a test of how well the company can balance an explicit social mission with shareholder expectations for making money.
Founded in 2005, Brooklyn-based Etsy sells items from a $110,000 antique desk from the 1800s to a $20 handmade antler pendant, and countless products in between. In 10 years, it has grown from a scrappy startup offering craftspeople a way to sell necklaces and needlepoint online to a marketplace of 54 million members that generated $1.93 billion of sales in 2014. And Wednesday, Etsy filed for an initial public offering of stock valued at up to $100 million.
The company is more than a folksy, funky brand. It’s a B Corporation, which is a for-profit company with a stated social mission certified by a nonprofit organization called B Lab. In its prospectus filed with the SEC, Etsy says its mission is to build a “human, authentic and community-centric global and local marketplace,” and cites any loss of its B Corp status as a risk factor to its brand.
There are only about 1,000 such B Corps worldwide, including Warby Parker, Patagonia and Ben & Jerry’s. But none of them are public companies on their own (Ben & Jerry’s is owned by Unilever). If Etsy does go public, it will be the first test of how well a certified B Corp can work on Wall Street.
Analysts agree it makes sense for Etsy’s growth to go public or seek a buyer, but some say it is difficult for companies to maintain their entrepreneurial or social spirit in the face of Wall Street pressure for financial returns.
Forester analyst Sucharita Mulpuru said it’s tough for a management team “to be true to its core company values while also delivering shareholder value.”