According to the United Nations International Telecommunications Union, by the end of the current year, nearly 3 billion people or 44% of the world’s households will have access to the Internet. Internet penetration is understandably the highest in the developed regions of America and Europe at 66% and 75% respectively. While three quarter of the total users will be from developed countries, two-thirds will come from the developing world as infrastructure advancements continue in other regions.
The rapid adoption of Internet usage is driving several SMBs and even Mom-and-Pop stores to an online presence. New York-based Squarespace offers these small shops access to the required tools and platform to build designer websites without the need for large purses or in-depth technical knowledge.
Squarespace was founded in 2004 in the dorm room of Anthony Casalena at the University of Maryland. Squarespace began when Casalena built a neat website for himself and realized that the on-site editing tools that he had developed for his project could become useful to others. Soon he raised $30,000 in seed money from his father to set up servers and he was in business.
Squarespace defines its mission as wanting to provide creative tools to power the web by enabling both designers and first time users in creating and managing the next generation of web and mobile experiences. Squarespace has managed to successfully integrate design and engineering to publish products that look attractive and are highly functional.
Squarespace began by offering a fully-hosted environment for creating and maintaining a website. Today, their 273 employees along with their simple user interface have helped create millions of websites on their platform. Squarespace’s customers include creative professionals, businesses, bloggers, and web developers who want to create high-quality websites. Last year, they expanded their offerings to add an e-commerce system that let bloggers and merchants embed products into blog posts and handle monetary transactions.
Squarespace earns revenues by charging their customers a monthly subscription fee for their hosting and web publishing service. Prices start for individual bloggers at $8 per month, which includes the ability to add 20 pages, 500 GB of blog bandwidth, and 2 GB of blog storage that can be accessed by two contributors. Bloggers can also sell a product through these pages and receive donations.
For commercial customers, pricing starts at $24 per month and includes unlimited pages, galleries, blogs, storage, and commerce options. In fact, business users can also benefit from enhanced features such as label printing, real-time carrier shipping and accounting features for their website. All offerings come with a free custom domain, mobile and web access, and a 24/7 customer support service.
The first year that Casalena was in business, he earned $50,000 in revenues. But since then, revenue growth hasn’t stopped. While Squarespace does not disclose financials, the company was estimated to be generating $17 million in revenues in 2012 and has been profitable for a while. They have remained venture funded with $78.5 million in funding from Accel Partners, Index Ventures, and General Atlantic. Their last round of funding was held last month when they raised $40 million from General Atlantic. Valuation at the time of this round of funding is not known, but the earlier round held in 2010 valued the company at $100 million.