VC-backed Farfetch gears up for listing

Kenny Wastell
21 August 2018

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Venture-capital-backed fashion e-commerce company Farfetch has initiated the process of launching an IPO on the New York Stock Exchange.

The business has filed a registration statement with the US Securities and Exchange Commission relating to the proposed offering of class A ordinary shares.

There are no details to date as to the number of shares being sold in the placement, nor the price range for the proposed offering.

London-headquartered Farfetch, which is an online marketplace for designer boutiques, has received significant venture backing since being founded in 2008. It had already completed five rounds of funding prior to its $110m Eurazeo-led series-F in 2016.

Farfetch had previously raised $4.5m in an Advent Venture Partners-led series-A, $18m in an Advent-led series-B, $18m in a Conde Nast-led series-C, $66m in a Vitruvian Partners-led series-D and $86m in a DST-led series-E. Other backers include IDG Capital Partners, Temasek Holdings and Felix Capital.

The business also expanded via the acquisition of Browns, an independent fashion boutique and international website based in London, in 2015.

Goldman Sachs, JP Morgan, Allen & Company and UBS Securities are acting as joint lead bookrunning managers for the proposed listing, while Credit Suisse, Deutsche Bank and Wells Fargo are acting as joint bookrunners. Cowen and Company and BNP Paribas are acting as co-managers.

On trend
Fashion e-commerce businesses have attracted increasing interest from private equity firms of all types in the past year, from the early stage VC funds up to large-cap buyout investors.

Apax Partners acquired VC-backed high-end apparel retailer Matches Fashion for an enterprise value of £800m (42x its EBITDA) in September last year, generating an 8.5x return for early-stage investor Scottish Equity Partners. Equistone Partners also invested in the sector, acquiring a majority stake in Berlin-based urban clothing company DefShop at an undisclosed valuation.

On the VC front, a consortium of firms including Mangrove, Northzone and Partech invested more than €60m in Lesara over two rounds since September 2017. Finally, Highland Europe (also an early backer of Matches Fashion) led a $20m series-A round for UK-based retailer Threads alongside C Ventures earlier this week.