Etsy was founded a decade ago in Brooklyn, and yesterday the company went public, almost doubling in value in one day. The IPO was not only momentous for the company, but also for Silicon Alley. $8.7b was invested in New York metro startups last year and the Etsy IPO is encouraging for the city's growing number of venture-backed startups.
It is a milestone for New York City, which has seen few startups, backed by venture capital, in recent years go public or sell for large amounts. Tumblr Inc., sold for $1.1 billion to Yahoo YHOO -2.91% in 2013, was a rare example. Both Etsy and Tumblr count New York-based Union Square Ventures as an investor. Union Square Ventures participated in a $600,000 seed round for Etsy in 2006, as Fred Wilson, the firm’s managing partner, described in a blog post. Etsy raised $267 million in IPO proceeds, which is the most ever for a New York-based startup that is backed by venture capital, according to industry tracker Dow Jones VentureSource. “Obviously, this is a very, very positive event in terms of the [New York City] startup ecosystem,” said Bill Gurley, general partner at Silicon Valley-based venture firm Benchmark Capital.