On May 30th, 2014 the home improvement shopping site Houzz filed a document, updating its certificate of incorporation, with the Office of the Secretary of State, for the corporations division, of the State for Delaware. It is a routine filing made by Delaware registered corporations when, amongst other reasons, a new financing by way of a company’s shares has been concluded and the official number of authorised shares may have changed.
The filing was picked up and noticed by venture analytics firm VCExperts, and looking at it one can see the most likely reason for the filing, namely a new issue of preference capital, comprising just over 2 million Series D convertible preferred stock with a redemption value in liquidation of just under US$75 per share. That item can lead one to reasonably infer the company has therefore issued about US$150 million in new capital.
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The same document also indicates a total of 31 million common shares are authorised for issue, including common shares issuable upon the conversion, 1 for 1, of the current total of just under 17 million convertible preferred shares. Accordingly, some business sites have also inferred that the total valuation of the company may now be as high as US$2.3 billion.
However, the actual number of common shares already issued is not stated anywhere in the filing itself, so the above calculation may not be well-formulated, and the actual total valuation could be much less. At its very lowest, if currently there were, say, just one single common share already issued then the now believed to be outstanding total of 17 million convertible preferred shares, times US$75 each, would then translate to a total valuation of about US$1.28 billion – of course still a very sizeable number.
Houzz was founded in 2009 by husband and wife team Alon Cohen and Adi Tatarko and in January, 2014 it reported 16 million monthly visitors.
Earlier in his career, Alon was a Senior Director of Engineering at eBay, where he helped start eBay’s developer APIs and manage technology teams responsible for eBay Stores, ProStores, advertising and analytics. Before that, he worked in various other software development roles and founded a software company together with his wife.
Alon graduated Cum Laude from Tel Aviv University with a Bachelor degree in Mathematics and Computer Science and an MBA. He lives in Palo Alto with his wife and two boys and enjoys traveling the world and playing basketball with his two sons, both of which he hopes to do more often.