Warby Parker IPO: Everything you need to know about Warby Parker
Rebecca Cattlin September 23, 2021 12:10 PM
Fashionable eyewear brand Warby Parker went public in September via a direct listing. The company was expected to be valued at around $3 billion but reached a market cap of $6 billion. Find out more about Warby Parker stock.
When was the Warby Parker IPO?
Warby Parker listed on September 29 via a direct listing rather than a traditional IPO. This means that the company didn't raise any money from the listing, but current investors were able to sell their shares on the open market.
Registered shareholders offered 77.7 million class A shares, which were expected to have net proceeds of $190 million. According the company’s filing its shares traded at $24.53 each in private exchanges, however shares started trading at about $54. The company will trade on the New York Stock Exchange under the symbol WRBY.
Goldman Sachs Group Inc., Morgan Stanley and Allen & Co. advised Warby Parker on the listing. Warby Parker is just one direct-to-consumer retailer listing this year, discover the other IPOs coming up here.
How much is Warby Parker worth?
Warby Parker is worth $6 billion following its listing, although it was only valued at $3 billion in its last funding round in August 2020. Warby Parker has raised over $536 million as a private company.
While this valuation might gather a lot of attention, it’s important to look at the company beneath, as the firm has yet to turn a profit and probably won’t for some time. The valuation is likely based on optimism for the company’s future, but Warby Parker would need to grow its revenue by about 600% to warrant the market capitalisation.
Learn what intrinsic value is
How to trade Warby Parker
You can trade Warby Parker in the same way as any other share on the market or choose from thousands of other global stocks with City Index.
- Open a City Index account, or log in if you’re already a customer
- Search for the company you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
Alternatively, if you’re not ready to trade live markets you can set up a free demo account to trade in a no-risk environment.
What does Warby Parker do?
Warby Parker is an eyewear retailer, founded in 2010, that offers fashionable products at affordable prices. The company started out as an entirely digitally-based platform but has expanded beyond e-commerce into brick-and-mortar spaces.
Warby Parker offers a full eye health service that includes eyeglasses, contact lenses, glasses insurance, eye exams and vision tests. Consumers can access the full suite of care online and in stores.
How does Warby Parker make money?
Warby Parker makes money through the sale of eyewear (starting at $95) and other services to consumers. More than 60% of Warby Parker’s total revenue comes from its online platform, with the remaining capital coming from retail locations.
Is Warby Parker profitable?
Warby Parker is not yet profitable; it reported a net loss of $7.3 million for the first six months of 2021 in its SEC-1 filing, which was the first glimpse the public has been given into the company’s books. The losses are concerning, especially given that the company’s sales growth is also declining.
However, Warby Parker did also disclose a 53% jump in revenue in 2021 up to $271 million from $177 million for the same six-month period in 2020.
It’s important to note that the company also recorded a $356.3 million accumulated deficit, which means the business’s debts are growing at a greater rate than its reported earnings.
What is Warby Parker's business strategy?
Warby Parker’s business strategy is a direct-to-consumer model, in which the brand has placed its focus on selling eyewear to its audience via social media and online ads. The company’s advertising strategy has helped the brand become a household name.
However, this e-commerce strategy is pretty flawed, as although other retailers have found success in the model, consumers are still reasonably reluctant to buy eyewear online. Despite Warby Parker’s home try-on service, most people still want the professional assistance of an optician and the experience of shopping instore rather than the logistics of returning the frames they don’t like. The online eyewear industry grew by just 4% in the past five years, and accounted for 4% of total glasses sales in the US in 2020.
However, now that Covid-19 is gradually coming under control, Warby Parker has started to boost its physical presence with brick-and-mortar stores. As of June 30, there were 142 Warby Parker retail outlets across 35 states with three stores in Canada. The company will be hoping that the shift away from a purely e-commerce model can help boost its top-line. WRBY is hoping to bring its total store count to about 160 by the end of 2021.
Who are Warby Parker’s competitors?
Warby Parker’s competitors are other US eyewear market giants such as Vision Source, Luxottica, National Vision, Walmart Vision and Costco Vision.
According to research by Statista, the global eyeglasses market could be worth over $197 billion by 2027. Given the popularity of Warby Parker, it’s reasonable to expect that the brand could benefit from this trend, but the company actually only has about a 1% share of the US eyewear market.
Warby Parker will need to focus on strengthening its balance sheet before anyone can get too excited, especially given the profitability of its larger competitors. The company is also lagging behind in terms of its retail locations, when you compare its 145 stores to National Vision’s 1,205.
Who owns Warby Parker?
Warby Parker is owned by a combination of 31 investors including the co-founders Neil Blumenthal, Dave Gilboa, Andrew Hunt and Jeffrey Raider, as well as the executive board and venture capitalists.
Tiger Global Management, T. Rowe Price, General Catalyst, D1 Capital Partners and Durable Capital among its largest investors, according to its filing.
Board of directors of Warby Parker
The management and directors of Warby Parker are as follows:
- Neil Blumenthal , Co-Founder, Co-Chief Executive Officer and Co-Chair
- Dave Gilboa, Co-Founder, Co-Chief Executive Officer and Co-Chair
- Steven Miller, Chief Financial Officer
- Andrew Hunt, Co-Founder and Director
- Jeffrey Raider, Co-Founder and Director
- Teresa Briggs, Director
- Joel Cutler, Director
- Youngme Moon, Director
- Gabrielle Sulzberger, Director
- Ronald A. Williams, Director
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.