A future of expansion may be in Houzz’s future as a source shared details on the online remodeling platform’s upcoming plans for entry into the stock market.
The source told Reuters that Houzz hired Goldman Sachs to prep the company’s initial public offering (IPO), set for early 2022. The IPO date is subject to change, the source says, as it depends on market conditions.
IPOs are a significant, telling move. Companies go public in order to raise capital unavailable to them as private companies, welcoming outside investors and, ultimately, shifting how the business operates and positioning it for expansion.
Houzz’s last round of private funding in 2017 resulted in a $4 billion valuation. The company has raised more than $650 million in private funding since its creation in 2009, says Reuters. Just as the housing and remodeling industries boomed in response to the pandemic, so has Houzz, despite laying off 10% of its employees, or 155 staff members at the start of the pandemic.
In addition to laying off staff, Houzz executives took a pay cut, and the company halted its plans for a furnishings line. Instead, the company launched its software tool: Houzz Pro. And CEO Adi Tatarko previously stated Houzz experienced a 60% growth in homeowners seeking professional services on the platform in 2020.
Talks about a Houzz IPO first occurred in 2018 when the company poached former LinkedIn exec Richard Wong as its first chief financial officer. Wong assisted LinkedIn with its IPO, ultimately leaving the company with the title of “IPO of the Year” but IR magazine and more than $5 billion in revenue. Though Wong departed Houzz in November 2020, leaving the position vacant.
When Houzz laid off 180 employees in January 2019, a source also shared that it was a move to slash costs in order to beef up profit prior to going public.
Houzz’s offerings include a furniture marketplace, editorial content, data-based reports, software, and more, and its goals with its IPO raise questions on the company’s next big move.