Warby Parker makes stylish eyeglasses and contact lenses at low cost. 11 years ago it started operating, building a widespread business from scratch. And now, the time has come for Warby Parker to go public.
Warby Parker’s IPO
On Tuesday, Warby Parker filed a confidential request with the Securities and Exchange Commission (SEC) to publicly list in the United States. An initial public offering (IPO) has not yet been set.
In a combined fundraiser last year, Warby Parker raised $ 245 million, valuing the company at $ 3 billion.
$ 125 million came from a Series F funding round led by Durable Capital Partners in the second quarter, followed by $ 120 million led by D1 Capital in the third quarter.
Major funders include Tiger Global Management, Spark Capital, Forerunner Ventures, General Catalyst, and Menlo Ventures.
Who are Warby Parker?
The founders of the company were four friends attending business school together.
Neil Blumenthal, Andrew Hunt, David Gilboa and Jeffrey Raider started Warby Parker as part of a business school initiative.
They asked the simple question: “Why are glasses so expensive?“
Neil Blumenthal knew there was no good reason. He had worked in a non-profit company called VisionSpring which provided eyewear to the poor in developing countries.
These glasses for the poor were produced alongside glasses that would be signed for the world’s greatest designers, including Chanel, Ray-Ban and Valentino.
In fact, he had discovered that eyewear is a monopoly market where a company, Luxottica, controlled over 70% of all branded eyewear.
In 2018, the Italian Luxottica merged with the French Essilor to create an even bigger company, EssilorLuxottica (EPA: EL).
It controlled 40% of the US eyewear market and 76% of the US sunglasses market. And according to Statista, EssilorLuxottica now holds 42% of the world market for corrective lenses.
When the founders of Warby Parker came up with their idea, eyeglasses and sunglasses were selling for a phenomenal price right down to the cost of manufacture. Thus, consumers demanded a cheaper alternative.
It launched in 2010 and was an instant hit, exceeding its first year sales targets in three weeks.
It was mainly thanks to a GQ article calling Warby Parker, the ‘Netflix’ of glasses, instantly sending satellite commands. In fact, the creators ended up with a waiting list of 20,000 customers and out of stock for nine months.
A sensational success story
In two years, the company had 100 employees, and by 2015 it was valued at $ 1.2 billion. Its unique selling point, in addition to being much more affordable, allows customers to choose and try on glasses at home.
He has also adopted a philanthropic culture within the company. His Buy a pair, gift a pair The program partners with VisionSpring to ensure that every time it sells a pair of glasses, another pair is given to someone in need.
In 2015, he launched the Students Project to provide free eye tests, eye exams and glasses to schoolchildren. And during the pandemic, he switched to helping the Covid-19 relief program in a number of ways.
The company reportedly became profitable in 2019, sparking rumors of an impending IPO.
How has the pandemic affected Warby Parker?
With 135 retail stores closed, Warby Parker suffered a heavy blow when Covid-19 struck, putting 1,500 workers on leave. But once the lockdown was put in place, online sales started to pick up.
The boom in online sales continues, and now that his outlets have reopened, he is also seeing a positive return from commerce there.
Best of all, around 75% of its in-store customers also shop on the Warby Parker website.
The Warby Parker’s team sees a bright future and plans to open 35 additional new stores this year.
Its business has experienced shipping delays, but overall its supply chain has not been too badly affected.
Blumenthal recently told the Wall Street Journal that less than 1% of glasses were sold online when the business started. Before the pandemic, that figure had risen to 5%, and now he believes it is over 7%.
The company has a lot of cash on the balance sheet and is considering an IPO with a view to sustainable growth.
Warby Parker’s is a great achievement and an exciting IPO to watch.