According to a survey by Netcraft in October 2013, there were more than 767 million websites on the Internet across all domains. The number of websites have quadrupled over the last five years. The influx of mobile devices has also created the need for websites that can cater to mobile operating systems. Additionally, today consumers demand a higher level of customization and functionality from a web site.
Israel-based Wix was founded by Avishai Abrahami, Nadav Abrahami, and Giora Kaplan in 2006 to simplify the process of website publishing for all users. They have successfully implemented the DIY model to become one of the largest website creation platforms on the Web. Today, they offer an easy-to-use cloud-based platform that enables more than 42 million users across 190 countries to use visual aids and editing tools and create websites as well as complicated web businesses. Best of all, users can create these pages without possessing any coding skills.
Their core product utilizes the drag-and-drop tool and comes with a media gallery that includes web page templates, graphics, image galleries, and fonts. The tool lets users customize their websites for most browsers as well as desktop, tablet, and mobile devices. Wix also has a curated App Market, that offers a choice of over 170 free and paid apps to embed on websites using a simple select and click process.
Wix operates on a freemium model allowing individuals and small businesses to open their basic portals for free and additional features are available for purchase. Pricing varies from $4.08 a month to $24.90 a month depending on the storage, bandwidth, support, and advertisement capabilities demanded by the user. Of the 40 million users worldwide, a mere 790,000 are paying customers. But that hasn’t stopped Wix’s revenue growth. They have delivered 16 consecutive quarters of revenue growth so far. However, they are yet to turn in profits.
Revenues have grown from $9.9 million in 2010 to $80.5 million in 2013.
Wix recently reported their fourth quarter and full year 2013 results. Fourth quarter revenue grew 88% over the year to $24.9 million with premium subscriptions growing 68% to 790,000. Losses have started to narrow and they ended the quarter with a loss of $0.45 per share compared with a loss of $0.63 per share reported a year ago.
For the full year 2013, revenue grew 84% to $80.5 million and net loss was $3.33 per share compared with $2.71 per share a year ago.
For the current quarter, Wix expects revenues of $26 million-$27 million with a loss of $13 million-$14 million. They are projecting to end the year with revenues of $127 million-$130 million and an adjusted EBITDA of a loss of $38 million-$42 million.
Till November last year, Wix was venture funded with $58.5 million in funding from Bessemer Venture Partners, Mangrove Capital Partners, Benchmark, and Insight Venture Partners. Last November, they went public on the Nasdaq under the ticker WIX and raised $127.05 million by selling 7.7 million shares at $16.50 each. This was the largest ever IPO for an Israel based firm since the 2010 listing of SodaStream International.
Wix’s Mobile Initiatives
During the recent quarter, Wix also released a new mobile solution. Given the importance of mobile Internet usage, the company is delivering more mobile based offerings. The mobile solution allows users to customize the mobile website without editing the desktop version. Since its launch, they have seen more than 1.6 million mobile sites created on their platform.
Wix’s stock is trading at $26.56 with a market capitalization of $670.35 million. It touched a high of $32.69 last month.