(Adds Amazon background and comments from Andreessen partner)
By Alistair Barr
SAN FRANCISCO, July 24 Zulily hired investment
banks in recent weeks to advise the fast-growing e-commerce
company on a possible initial public offering, according to two
people familiar with the situation.
Zulily, a "flash sales" company founded by former Blue Nile
(NILE.O) executives Mark Vadon and Darrell Cavens, tapped
Goldman Sachs (GS.N), Citigroup's (C.N) investment bank and Bank
of America Merrill Lynch (BAC.N), for the IPO push, according to
one of the people.
Zulily is one of the first of a new crop of e-commerce
companies to try to go public. Other e-commerce start-ups eyed
for potential IPOs by bankers include Etsy, Gilt and Wayfair,
according to the other person.
The people requested anonymity because Zulily's plans are
private. Zulily spokeswoman Laura Jones declined to comment.
Spokesmen at the banks declined to comment.
Zulily's move comes less than a year after the company
raised $85 million in a deal led by venture capital firm
Andreessen Horowitz that valued it at about $1 billion.
Flash sales companies sell merchandise in short term,
heavily discounted events each day. The sector grew fast after
the 2008 financial crisis, but not all companies have thrived
Amazon.com Inc (AMZN.O), the world's largest Internet
retailer, has its own flash sales business called MYHABIT, and
investors are generally wary of other e-commerce companies
because Amazon is so dominant.
However, Zulily's focus on kids' apparel and mothers as
shoppers has helped the company grow quickly. Founded in 2009,
the company said late last year that it had 10 million members
and featured 35 sales events daily.
"We are impressed with Zulily’s strategic positioning," Jeff
Jordan, a partner at Andreessen Horowitz and former eBay
(EBAY.O) xecutive, wrote in a November blog soon after the
firm's investment in Zulily.
"One reality in e-commerce today is that you want to avoid
trying to compete directly with Amazon, who is hyper-aggressive
in leveraging their enormous scale and cost advantage to offer
the largest selection and lowest prices on the Internet," Jordan
added. "Zulily does this by aggregating a long tail of talented
designers who typically lack extensive national distribution."
(Reporting by Alistair Barr and Sarah McBride in San Francisco;
Editing by Gerald E. McCormick and Bob Burgdorfer)
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