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Etsy is a website where people sell handmade crafts and vintage goods may be the biggest technology IPO to come out of New York since 1999.

Etsy Inc. is about to show Silicon Valley that Brooklyn's hipsters can also do initial public offerings.

The website where people sell handmade crafts and vintage goods may be the biggest technology IPO to come out of New York since 1999. Etsy, which offers items such as a $529 turquoise 1957 Royal Quiet De Luxe typewriter, is working on an IPO that could take place as soon as this quarter, people familiar with the matter said. The company is looking to raise $300-million, one person said.

The deal could mark a turning point for New York's tech– startup scene, where dozens of IPOs – from ad-tech company AppNexus Inc. to shopping site Gilt Groupe Inc. – are anticipated and have yet to materialize. The last time a technology company from New York raised more than $300-million, the dot-com bubble was fueling IPOs from online broker TD Waterhouse Group Inc. and Barnesandnoble.com Inc., the Web spinoff of the bookstore chain.

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Etsy, based in Brooklyn, New York's Dumbo neighborhood, is working with Goldman Sachs Group Inc. and Morgan Stanley on the IPO, said the people familiar with the situation, who asked not to be identified because the information is private.

While Silicon Valley startups often pride themselves on high-tech, the idea for Etsy came from a computer made of wood. Rob Kalin, a painter, carpenter and photographer, founded Etsy in 2005 after failing to find a place to sell his hand-built computers. The company now has about 26 million items listed on its site – including a stuffed toy robot and a crown made of roses.

Selling Commission

Etsy charges 20 cents for sellers to list products, and takes a 3.5 per cent commission from each item sold. The company also generates revenue from advertising and payment processing and posted $1.35-billion in gross merchandise sales in 2013, according to its website. Etsy is likely to release a prospectus for the IPO this month with more financial details, according to the people familiar with the situation.

The company is one of several closely held e-commerce startups – including Fab.com and Gilt – that have been valued at more than $1-billion. Some have run into hurdles, with Fab.com recently winnowing down operations and Gilt still private after having worked on an IPO last year. E-commerce is traditionally a tough field for startups to gain scale in because of the dominance of Amazon.com Inc. across product categories.

Representatives for Etsy, Goldman Sachs and Morgan Stanley declined to comment.

Niche Marketplace

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E-commerce in the U.S. is expected to reach $493.9-billion in 2018 from $305.7-billion in 2014, according to research firm EMarketer. Amazon is the biggest Web retailer by revenue, with an online department-store approach offering a broad range of products. Etsy is competing in the craft niche, where sites distinguish themselves with unique offerings and give artists a marketplace to showcase their work.

The IPO could be the first among e-commerce companies in 2015 after the industry raised $29-billion last year – including fundraising by Chinese giants Alibaba Group Holding Ltd. and JD.com Inc., which raised $25-billion and $2-billion, respectively.

U.S. retailers Wayfair Inc., which sells home goods online, and food-delivery website GrubHub Inc. each tapped public markets in 2014 and have climbed an average of 46 per cent since their debuts.

Etsy is led by Chad Dickerson, a former Yahoo! Inc. executive. It has offices in cities around the globe, including Berlin, Toronto and Melbourne. The company's investors include venture capital firms Union Square Ventures and Accel Partners.

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