Ever heard of Wayfair.com? If not, don’t worry – it’s not your fault. The company became the biggest online purveyor of home goods in the U.S. practically over night, so despite selling household wares, it’s not quite a household name just yet.
“Yet” is the operative word here though. The company is blowing up (sales exploded from around $600 million last year to nearly $1 billion in 2013) and earlier today announced that it raised more than $157 million from a number of different investors. This gives the company a valuation of around $2 billion — putting it on par with companies like Nest, Snapchat, and Box, according to the Wall Street Journal.
Wayfair sells furniture, lighting and other home goods, and is known for offering limited-time discounts known as flash sales. When your really get down to it, it’s really just another ecommerce site, but the company been able to successfully fend off rivals like Amazon, Overstock, and others by offering a unique, specialized inventory.
It wasn’t always so organized and awesome though. The company actually got its start as CSN stores back in 2002, selling speaker and television stands through a site called RacksAndStands.com. Founders Niraj Shah and Steve Connie decided that, following the dot-com crash, it was best to go with a generic name to avoid scaring off manufacturers who got burned when the bubble burst.
Over the next eight years, the two of them started more than 270 separate websites, each of which sold a highly specific category of home goods.
“Our view was that you just had to pick a category that was off the beaten track,” Shah said in an interview with Business Insider. “You couldn’t focus on electronics or, you know, the same items that Amazon and others were selling.”
There was AllBarsStools.com, EveryMirror.com, BedroomFurnitureDirect.com, and a boatload of others. The strategy was rooted in search engine optimization — Shah and Connie figured that with that a wide array of specific, niche sites with generic names, people searching for home goods on Google were bound to come across one of their stores.
It worked beautifully, and by 2010 the company was pulling in nearly $400 million in annual sales, but the problem was that people who bought from their sites had no way of knowing they were all ran by the same corporation. So, to unify all their brands, Shah and Connie formally launched Wayfair in 2011. The rest is history.
Given that $1 billion in annual sales is a cutoff for filing confidentially with the Securities and Exchange Commission, an IPO is expected in the next few months.