Shoes.com plans to raise up to $50 million for acquisitions
January 26, 2016 11:50 AM
(Bloomberg)—Shoes.com, the Canadian web retailer that almost tripled its revenue to C$235 million ($165 million) last year, has plans to raise from $25 million to $50 million in private funding to help pay for acquisitions.
The company, which competes with Zappos.com and Shoebuy.com, No. 105 in the Internet Retailer 2015 Top 500 Guide, as well as online retailers such as Amazon.com Inc. (No. 1 and the owner of Zappos), is looking to raise the money by the end of March from existing investors and a strategic partner, said CEO Roger Hardy. While he declined to give the valuation he was aiming for, the Vancouver-based company fetched a valuation of $320 million in May 2015 when it raised $45 million.
Hardy previously ran Coastal Contacts (No. 135) and upended the industry by making it easier to buy contact lenses online, later taking the business public then selling it to French contact lens manufacturer Essilor International SA for C$430 million. Now Hardy is working to grow Shoes.com (No. 180) in preparation for a potential initial public offering. The startup is the biggest online shoe seller in Canada and recently captured the second-place spot in the U.S. behind Amazon-owned Zappos.com, he said.
“We’re looking at a number of acquisitions, in fact we have about three in the funnel right now,” Hardy said. Shoes.com increased its revenue from C$87 million in 2014 to C$235 million in 2015 and forecasts 2016 sales of C$400 million, Hardy said.
The company was planning a potential market debut for late 2016, and may now push that back to 2017 because of market conditions, Hardy said. The U.S. IPO market is on track for the slowest month since the recession.
“The IPO markets, as you know, have been sort of neutral and we’ve been waiting for them to relight,” Hardy said in an interview on Bloomberg TV Canada.