Squarespace Founder Is A Billionaire Ahead Of Direct Listing

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Squarespace, a platform that helps small businesses and individuals build customized websites and online stores, is getting ready to list its shares on the New York Stock Exchange. There is at least one winner ahead of the listing: its founder and CEO, Anthony Casalena. Squarespace’s prospectus, which it filed on April 16 with the Securities and Exchange Commission, showed that Casalena, 38, owns about 33% of the company.

Squarespace’s decision to go public comes exactly a month after it raised $300 million from investors who valued the company at a $10 billion valuation. Using that valuation, Forbes calculates that Casalena’s stake is worth $3 billion (after applying a discount because Squarespace is a private company).

The New York-based company’s software has become increasingly popular during the pandemic as consumers turned to e-commerce. Subscriptions to Squarespace, which can be purchased on a monthly or annual basis, come with different options, from a simple plan including a domain and a website to more advanced options that provide website analytics and merchandising software. The number of subscribers increased nearly 23% in 2020, to 3.7 million, while Squarespace spent 40% more on marketing efforts, hoping to cash in on the trend. In 2020, it pulled in $620 million in revenues, up 28% from the previous year, and had nearly $31 million in net income, down 47% from 2019, in part due to an increase in expenses. Squarespace, which has more than 1,200 employees at offices across the U.S. as well as Ireland, declined to comment.

The internet has changed tremendously since 2003, when Casalena, who was studying computer science, founded the company from his dorm room at the University of Maryland. He got a $30,000 loan from his parents and used it to start building the company.

“I was immediately frustrated by the lack of polish and the integration work required to build even something simple using the technologies available at the time,” he wrote in a letter filed with the prospectus. “Squarespace was born of that frustration.”

Casalena ran Squarespace on his own for a few years; he hired his first employee in 2006. Four years later, the business received funding from its first institutional investors, venture capital firms Accel and Index Ventures. That same year, Squarespace started to expand its focus, according to Casalena.

“The platform we had originally started with, which was a very blog-centric platform, was not really going to make it into the next era of what the Web was becoming,” he told Forbes in February 2020. Since 2010, the company has introduced e-commerce capabilities as well as an interface that allows customers to book appointments when they visit a vendor’s Squarespace website—helpful if you are running a small business such as a spa or a hair salon.

Stock prices of competitors to Squarespace—such as e-commerce platform Shopify and website-hosting company GoDaddy—have skyrocketed in the past year. Shares of Shopify, which pulled in $2.9 billion in revenues in 2020, have nearly doubled, whereas the stock price of GoDaddy increased about 30%. In an effort to stay competitive, in March, Squarespace acquired Tock, an online booking platform for restaurants, for $400 million in cash and stock.

The acquisition appears to be in line with the chief executive’s motto. “Does this product match what people are doing on the Web today?” he asked in his 2020 interview with Forbes. “We’re always trying to adapt.”

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