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eCommerce - Thursday, January 31, 2008

Hipster eCommerce Biz Etsy Raises $27M

Famed Accel Partners VC Jim Breyer has led a $27M round in Etsy. Many including us had wondered if Breyer had over-paid at what seemed like a late stage for Facebook. We won't second guess Breyer here. We have thought that Brooklyn-based Etsy is on to something. Etsy provides a way to buy and sell handmade items. The site follows in the tradition of open craft fairs, giving sellers personal storefronts where they list their goods for a fee. You go anywhere in this country and you'll find farmer's markets and other venues for people to sell hand-made goods. These folks use to be on eBay but the goliath has lost touch with these people who are gravitating to Etsy.

Etsy makes money by charging a listing fee of 20 cents for each item and getting 3.5% of every sale, with the average sale about $15 or $20.

In December 2007, Etsy its two-millionth sale. In November 2007, buyers spent $4.3M purchasing 300K items for sale on Etsy, an increase of 43% from October 2007 and it now claims to be profitable.

In addition to Accel, two existing Etsy investors, Union Square Ventures and Hubert Burda Media, joined the round.

As you can see from this video, Etsy is run by a young man while most of its users are women

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