Etsy.com takes $27 million investment and Jim Breyer joins the board

 

 

Etsy.com have just accepted a $27 million investment. The funding comes in part from two existing Etsy investors, Union Square Ventures and Hubert Burda Media, and from an important new investor: Jim Breyer at Accel Partners.

Why does Etsy need investment?

Etsy is almost break-even, meaning the revenue pays all our bills, including the salaries and benefits of the fifty employees.

From Etsy's blog here are are some specific reasons why they ahve raised more money:

• Given our current rate of growth — with how many images we store and how much traffic we serve — we estimate that we'll need to spend $5 million on hardware and hosting in the next two years. This is not only to keep up with what we have now, but to support new features and expansion.


• Right now, Etsy only supports the US Dollar and the English language. We want to support many other currencies and languages, but to do so requires significant resources: from people to translate the site as it exists now, to providing customer support in new languages.


• The checkout experience on Etsy is not ideal. Every buyer has to pay every seller individually when checking out. Based on our own tests, and based on a lot of unsolicited feedback, this is a major hurdle to increasing sales. People shopping on Etsy expect an experience comparable to other leading ecommerce sites like Amazon.com. We aim to build an in-house payment system, and to do this properly requires a significant amount of capital investment.


• In the same vein as the previous point, people searching for items on Etsy expect search to be comparable to Google. This is quite a lofty goal, but we're up for the challenge. Our new investment will help us achieve this.


• Etsy is a platform on top of which tens of thousands of other people run their own businesses. We have a huge responsibility to keep our service humming and improve it based on community feedback. In order to do this, first of all we need to stick around. While it's nice to know that we can cover our own operational costs, I never want to make the excuse that we can't succeed because we lack funds to buy servers, cover a bandwidth bill, provide a warm office for our employees and so on. In other words, we need a bit of a cushion in order to provide the best service we can, confident that we can spend a bit more when need be.


• We need to be able to make it through any hard times that hit the economy. We believe that the current economy, favoring megacorporations and supersizes, is unstable. People who make a living making things, especially those we have on Etsy, will play a key role in revitalizing and stabilizing the world.


• The services Etsy provides, from customer support to shopping tools, need to grow and improve. We want to offer superb customer service, including live phone support; we want to provide our sellers with detailed stats on their shop. We can do these, but they require more resources than we currently have.


• It is immensely important to me that all Etsy workers are paid a good salary, provided with full benefits (medical, dental, vision) by the company. Many companies, far too many companies, underpay their employees, don't make workers employees at all ("permalancers" and "permatemp" are the new words for this), and provide few if any benefits. (We also know that many of the sellers on Etsy lack access to such benefits as health insurance, and we want to work to change this.)

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