Case Study: Wayfair

Explore this investment 10.07.14

Fast Facts

  • Sector Knowledge
  • Experience with Founder-Owned Businesses
  • Minority Investor
  • Follow-On Investments
  • IPO

When Great Hill Partners was looking to broaden our scope within the eCommerce sector, we felt like singing, “Wayfair, you’ve got just what I need…”

Great Hill Partners initiated conversations with Wayfair in 2009, and after a lengthy, active dialogue, in early 2011, we found ourselves on a short list of investors invited to formally re-engage given our eCommerce/retail domain expertise and long history of working with founder-owned businesses.

Impressed with Wayfair’s business model, financial profile and strong management team, we participated in a $165 million minority financing round which was the first outside capital the company had taken on. The capital was earmarked to support future growth and to provide liquidity for the company’s founders (who collectively continued to own a majority stake in the company), certain other investors, and long-term employees. GHP was the largest investor in the transaction.

As a minority shareholder and active board member, GHP has worked closely with Wayfair’s founders on general corporate strategy. We interviewed and recruited a new CFO and independent board members, including Romero Rodrigues, CEO of prior GHP portfolio company BuscaPé (sold to Naspers for $374 million in September 2009).

We also provided benchmarking to management, leveraging GHP’s significant experience and portfolio breadth in online and offline customer acquisition and eCommerce. Additionally, GHP led due diligence, negotiation and structuring of the company’s late 2012 follow-on investment to help accelerate growth in Joss & Main, the company’s rapidly growing flash sales business unit.

Finally, GHP has been an active partner in helping the company access the capital markets, assisting management through its $367 million IPO in October 2014. As part of the public registration process, GHP managing partner Michael Kumin was named lead independent director on the board. Post-IPO, GHP continues to be the single largest institutional investor in the company.