Arts and crafts is apparently very big business, as e-commerce craft site Etsy added not only another round of funding to its coffers, but an ex-Googler to its C-suite.
TechCrunch reported late Thursday that Etsy raised $20 million in its fifth venture round. The latest round was led by Index Ventures, which placed partner Danny Rimer on Etsy's board. The board is now made up of founder Rob Kalin, Flickr and Hunch co-founder Caterina Fake, Accel partner Jim Breyer, and Union Square Ventures partner Fred Wilson. Previous investors Accel and Hubert Burda also invested in this round.
On top of that, Etsy hired Google international vet Adam Freed as its chief operating officer, All Things D reported. Freed was a director of international product management at Google before leaving the company two years ago.
Concerning the new round of funding, TechCrunch observed:
'The round gives Etsy a pre-money valuation of just under $300 million, about triple the valuation it got during its last, $27 million round in January, 2008. Most of the shares sold—nearly $14 million of the $20 million—were secondary shares held by some of the early investors. But unlike other rounds we've seen lately, this wasn't a liquidity event for founders. Kalin says he did not sell any shares, nor did any employees.'
That indeed was the case. As Wilson of Union Square pointed out on his blog today: 'The interesting thing about this transaction is that it was not founder liquidity driven. The founders did not sell in the transaction. It was not VC liquidity driven. Some of the existing VC firms actually bought in the transaction. It was angel liquidity driven.'
And this is good news, Wilson says, because it shows 'angels can get liquidity via these secondary transactions. They don't need to wait for the sale of the company or possibly the IPO.'
Of course, by regaining liquidity, angels are more apt to make new investments. Good news for sure.
MATT QUINN contributes to the Wall Street Journal's corporate finance blog. He has also written extensively about banking and corporate finance for publications including Inc., American Banker, and Financial Week. He lives in Brooklyn, New York.