According to a report by Global Market Insights, the global eyewear market is forecast to grow to $180 billion by 2024. While the industry remains predominantly a brick and mortar one, in the US, online stores were valued at $48 billion in 2016. Online eyewear retailer Warby Parker is among the leading online eyewear players which is rumored to be eyeing a public listing.
Warby Parker’s Offerings
Dave Gilboa, Neil Blumenthal, Jeff Raider, and Andy Hunt founded Warby Parker in 2010 to sell affordable prescription eyeglasses and sunglasses. Besides selling the affordable brands, Warby Parker has also expanded into designer eyeglasses online. It is difficult to buy glasses online as one may not understand how the glasses look on their face. To help solve the dilemma, Warby Parker offers the Home Try-On service whereby customers can test up to five frames at home free of charge. Unlike other players that moved from brick and mortar presence to online, Warby Parker has followed the opposite path. After establishing presence in the digital world, Warby Parker now has more than 50 stores spread across the US and Canada.
Warby Parker’s success lies in its ability to offer discounted glasses to its users. It is able to do so by designing the glasses in-house and avoiding licensing fees. Additionally, it saves costs by working directly with suppliers and by shipping products directly to consumers with valid prescriptions.
Warby Parker’s Financials
Warby Parker is privately held and does not disclose its detailed financials. Analysts estimate that it was operating at an annual revenue run rate of $250 million last year.
Warby Parker has been venture funded with $215.5 million in funding from investors including American Express, Spark Capital, BoxGroup, Brand Foundry Ventures, First Round Capital, General Catalyst Partners, Lerer Hippeau Ventures, Menlo Ventures, Microsoft, Red Swan Ventures, SV Angel, Thrive Capital, Tiger Global Management, T. Rowe Price (New Horizon Fund), and Wellington Management. Its last round of funding was held in April 2015 when it raised $100 million at a valuation of $1.2 billion.
The market correction last year, when company valuations dropped, appear to have impacted Warby Parker’s valuation as well. In August 2017, several mutual funds marked down their investment in the company with some dropping it by as much as 17%, suggesting a valuation of nearly $890 million instead. Many believe that the company has been ready for an IPO for a while, with some hoping that it would finally list this year.
Questions for Warby Parker’s Board?
Warby Parker has found a significant niche in the e-commerce world of eyewear. The worry is that every category that sees traction eventually gets on Amazon’s radar. Adding Warby Parker to its portfolio would not only help Amazon expand its retail presence within the segment, but also help it develop newer devices such as smart glasses. What is Warby Parker doing to keep Amazon away, or is Warby Parker waiting for the right bid from Amazon?
This segment is a part in the series : 2018 IPO Prospects