(Photo courtesy of Etsy)
Etsy closed at $8.51 per share Monday afternoon, putting its market cap at $965 million, losing, officially, its unicorn status, at least for now.
Etsy’s had a rough time of it since going public on April 16, 2015. On that day it open at $31 per share, and since then it has seen its value erode. The company’s stock price, as of yesterday’s close, is down 71 percent.
The reason is anyone’s guess, but growth has slowed, as the company might have reached the saturation of its market. The birth of Amazon’s Handmade at Amazon, which is essentially Etsy but with Amazon’s market reach, can’t help.
Or perhaps this is a symptom of a wider tech sector slowdown. In the Wall Street Journal yesterday, Chris Mims had a piece called, The Tech Bubble Is Bursting, in which he argues, well you get it.
Last week, Manhattan research firm CB Insights posted a piece, Don’t Look Down: Downrounds Now More Common Than Unicorn Births, in which it published a graph showing that downrounds (funding rounds where a startup is valued at less than it had been in a previous funding round) are increasing and the number of new tech unicorns is decreasing.
In light of all this we took a look back at one of Technical.ly Brooklyn’s most popular posts, The 10 biggest tech companies in Brooklyn, written in August of 2014. Of the top five, three are struggling or out of business.
Last September, No. 1 Amplify laid off most of its workers. We reported last week that No. 3, MakerBot, will be laying off most of its manufacturers and shuttering its Industry City plant. And Etsy at No. 5 is now worth less than a billion dollars.
That leaves Huge and Vice from the top five, both of which seem to be doing well. In fact, Vice was recently valued at more than $4 billion. Both Vice and Huge exist in already formed markets, media and marketing, however, so their title as tech companies stems more from their early use of digital technologies in established sectors, than from creating new markets or products. Still, they employ a ton of tech-savvy Brooklynites.
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