Zulily Follows Twitter With Its Own ‘Secret’ IPO Filing, Reveals Interesting Information

Zulily, a flash-sales site, has filed for a “secret” IPO today. In its Form S-1, the company reveals that it has an accumulated deficit of $55.6 million and saw its sales surge to $331.2 million last year. Zulily’s IPO filing figures to be one of the most important e-commerce IPOs ever and may serve as a litmus test for investor interest in consumer-facing Internet companies. Twitter, which also filed for its “secret” IPO under the Jumpstart Our Business Startups (JOBS) Act of 2012, will be a similar test.

Here are some of highlights from Zulily’s Form S-1:

• The company wants its stock listed on the NASDAQ under the ticker symbol “ZU.”
• As of June 30, zulily has sold more than 42 million items to more than 2.9 million customers.
• As of June 30, the company had 2.2 million active customers (i.e., customers who made at least one purchase in the last year), up 93.1 percent from the 1.2 million active customers it had on July 1, 2012.
• For the 12 months ended June 30, zulily generated $214 of revenue per active customer, up 10.9 percent from $193 of revenue per customer during the 12 months ended July 1, 2012.
• For the 12 months ended June 30, 82.9 percent of U.S. orders were placed by previous customers, up from 79.1 percent during the 12 months ended July 1, 2012.
• In the second quarter of 2013, about 42 percent of U.S. orders were placed from a mobile device.
• In 2012, zulily reported $331.2 million in net sales, up 132.4 percent from 2011; and a net loss of $10.3 million, an improvement from a net loss of $11.3 million in 2011.
• In the six months ended June 30, the company reported $272.0 million in net sales, up 114.2 percent from the same period last year; and a net loss of $2.4 million, an improvement from a net loss of $6.2 million in the same period last year.
• The company had 886 employees as of June 30, up from 329 on Dec. 31, 2011.
• Children’s apparel is the company’s biggest merchandise category, though all non-children’s apparel categories combined accounted for 53 percent of zulily’s U.S. units ordered in the six months ended June 30, up from 45 percent in 2012.
• In the second quarter of 2013, zulily says approximately 42 percent of its U.S. orders were placed from a mobile device, up from approximately 39 percent in the first quarter of 2013, and up from approximately 31 percent in the fourth quarter of 2012.
• In the six months ended June 30, 76 percent of the company’s U.S. daily website visitors came from email or mobile push communications, or other unpaid sources (e.g., direct traffic and search).
• In the six months ended June 30, zulily’s average order value was $53.23.
• Zulily notes a long list of risk factors for its business and industry, including but not limited to:
  • failure to effectively manage growth (the company notes a need to dedicate “significant resources” to grow its mid-level management to keep up with overall headcount);
  • significant operating losses in the past (zulily has accumulated net losses of $55.6 million as of June 30, and it says it expects its operating expenses will “increase substantially in the foreseeable future”);
  • a highly competitive industry (zulily lists Fab, Gilt Groupe, HauteLook, MyHabit, One Kings Lane and Rue La La as competitors in the flash-sales space); and
  • slower delivery time compared with other e-commerce retailers due to not holding inventory until products have been ordered by customers (zulily’s average order-to-ship time in the second quarter of 2013 was 10.6 days).

Zulily, which launched in January 2010, raised $85 million in a Series D round of funding in late 2012, which valued the company at about $1 billion. In a Q&A with DM Confidential in December, Jessica Shapiro, director of brand and communications for zulily, said the company would use that some of that funding to expand its international reach, a goal that’s also noted in its Form S-1 filing.