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United States securities and exchange commission logo
March 12, 2021
David S. Rosenblatt
Chief Executive Officer
1stdibs.com, Inc.
51 Astor Place, 3rd Floor
New York, New York 10003
Re: 1stdibs.com, Inc.
Draft Registration
Statement on Form S-1
Submitted February
12, 2021
CIK No. 0001600641
Dear Mr. Rosenblatt:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1 submitted February 12, 2021
Prospectus Summary
Company Overview, page 1
1. Please disclose the
measure by which you are the "leading" online marketplace for luxury
design products.
2. We note your references
to "on-platform GMV" throughout your filing. Please amend
your disclosure in this
section and as appropriate throughout your filing to define "offline
sales," quantify the
amount of GMV attributable to these sales, and describe how and
where these
transactions take place. Please also clarify if you receive fees for offline
sales, and if the fees
differ from those charged for on-platform sales.
David S. Rosenblatt
1stdibs.com, Inc.
March 12, 2021
Page 2
3. You note that in 2020 the average number of orders per Active Buyer
was 2.2. Please
disclose the percentage of your Active Buyers that make more than one
purchase. To the
extent this varies materially from year-to-year, please provide the
information for
comparable periods.
Increasing Online Penetration, page 3
4. Here and throughout your filing, you disclose that "[w]hile the
COVID-19 pandemic has
accelerated the shift to online sales in the personal luxury goods
market, we believe the
driving forces behind this shift were already well underway before the
COVID-
19 pandemic and are expected to remain." Please amend your disclosure
where you
discuss these driving forces to clarify whether, as the pandemic
evolves, you expect these
drivers to continue to accelerate online sales growth at the same
rate. In this regard, we
note your disclosure on page 17 that "our growth rates are likely to
experience increased
volatility, and may decline, as the COVID-19 pandemic evolves."
Our Growth Strategies, page 6
5. You disclose that "[o]f our 3.5 million users as of December 31, 2020,
we estimate that
approximately 70% are U.S.-based and 30% are international, which
represents less than
1% penetration of the population of both markets." Please clarify
whether "users" refers
to buyers or sellers or both. In this regard, we note your disclosure
on page 94 that "[a]s
of December 31, 2020, 39% of the supply on our online marketplace
comes from outside
the United States, while only 19% of buyers are located
internationally."
Grow Our Marketplace Supply, page 7
6. We note your reference here and throughout your filing to a seller
survey conducted by
you. Please revise here or elsewhere to provide context for the
survey, including a
discussion of the number of sellers you surveyed, the number that
responded, and where
you discuss certain conclusions about your market and sellers based on
the survey,
provide quantification of the number of sellers that responded in a
way that supports
your statements. As a related matter, please provide similar
disclosure for the survey of
your "buyer base," discussed on page 88.
Summary Consolidated Financial Data
Key Operating and Financial Metrics
Non-GAAP Financial Measures,
FirstName LastNameDavid page 15
S. Rosenblatt
Comapany
7. Name1stdibs.com,
Please tell us how your Inc.
non-GAAP measure adjusted EBITDA represents the
"EBITDA"
portion which
March 12, 2021 Page 2 is defined as earnings before interest, taxes,
depreciation and amortization.
FirstName LastName
David S. Rosenblatt
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1stdibs.com, Inc.
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Risk Factors
Risks Related to Our Business and Industry
"If we fail to generate a sufficient volume of listings of luxury design
products . . .", page 20
8. We note your disclosure that "[r]evenue generated from new sellers may
not be as high as
the revenue generated historically from our existing sellers or as
high as we expect." To
provide additional detail for investors regarding your business model
and growth
prospects, in an appropriate place in your filing, please disclose the
portion of revenue
generated from new sellers compared to existing sellers.
"We rely, in part, on sellers to provide a positive experience to buyers.",
page 22
9. We note your disclosure that "[i]n some situations, we may choose to
reimburse buyers
for their purchases to help avoid harm to our reputation, but we may
not be able to recover
the funds we expend for those reimbursements." Please quantify these
reimbursements
for the periods presented, if material, and tell us whether and to
what extent you recovered
the funds expended, if applicable.
Risks Related to Tax and Accounting Matters
"Our ability to use our net operating loss carryforwards . . .", page 46
10. We note your disclosure that "[i]f we experience one or more ownership
changes as a
result of this offering or future transactions in our stock, then we
may be limited in our
ability to use our NOL carryforwards to offset our future taxable
income, if any." Please
amend your disclosure to state whether you expect this offering to
result in an "ownership
change."
Risks Related to This Offering and Our Common Stock
"Our amended and restated charter that will be in effect upon the closing of
this offering . . .",
page 53
11. Please amend the disclosure in this section to alert investors to the
exclusive forum
provision in your by-laws. Further, please provide an amended charter
stating that the
exclusive forum provisions to not apply to Exchange Act claims, as
disclosed in your
filing, or tell us how you will inform future investors of the
provision's limited
applicability.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Company Overview, page 64
12. Please briefly describe how you calculate the value of your seller
stock.
Our Business Model, page 65
13. We note your disclosures throughout the filing that the Trade 1st
program is important to
your business and growth prospects, and that you intend to use the
program to cultivate
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1stdibs.com, Inc.
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interior designer retention. Please enhance your disclosure about
seller fees to describe
the difference, if any, in fees you charge to participants in your
Trade 1st program.
Seller Marketplace Services, page 65
14. We note your disclosure that "[o]ur sellers pay annual subscription
fees to access our
online marketplace, which allows them to promote and list their items
and execute
successful purchase transactions with buyers." Please quantify the
percentage of your
revenue attributable to subscription fees, to the extent material. In
this regard, we note
that you use GMV to discuss the health of and growth opportunities for
you business
throughout your filing, but these subscriptions fees appear to provide
revenue to you in
addition to the marketplace transaction fees you receive from sellers
that directly relate to
your GMV.
Key Operating and Financial Metrics, page 66
15. Please tell us whether you consider average order value (AOV),
discussed throughout
your filing, to be a key business metric that you use to help evaluate
your business,
identify trends, formulate business plans, and make strategic
decisions. If so, please
discuss it here and indicate why the metric is useful to investors and
how management
uses the metric in managing or monitoring performance of the company.
If not, please
explain why you do not use this metric in evaluating your business.
Gross Merchandise Value, page 66
16. You define GMV as the total dollar value from items sold by your
sellers through you,
and includes all sales reported to you by your sellers, whether
transacted through your
marketplace or reported as an offline sale. Please explain to us and
disclose how sellers'
offline sales represent items sold through you and how these sales are
relevant to your
business and platform. We note you refer to "on-platform GMV" as a
subset of GMV that
represents only sales placed or reported through your marketplace.
Key Factors Affecting Our Performance
Sourcing and Quality of our Highly-Curated Luxury Supply , page 67
17. We note your disclosure that "one seller represented approximately 5%
of GMV and no
other sellers accounted for 1% or more of GMV for the year ended
December 31, 2020."
Please amend your disclosure to clarify whether you expect that seller
to continue to
contribute significantly to your GMV, and the consequences to you if
the seller does not
continue to sell items through your service.
Sourcing and Quality of our Highly-Curated Luxury Supply , page 67
18. In the chart on page 68, you disclose the average retention rate for
your 2015-2019
cohorts, which increases from 100% in the first year. We also note
your disclosure that
"[i]n 2020, we retained 36% of the 2019 on-platform GMV from buyers
acquired in
David S. Rosenblatt
1stdibs.com, Inc.
March 12, 2021
Page 5
2019." Therefore, it appears that your 2019 cohort differs
significantly from the average
cohort data presented in the chart. Please revise your cohort
disclosure to provide
retention rates for each cohort individually for the periods presented
in your filing.
Alternatively, please explain why the 2019 cohort retention rate
deviates substantially
from the average retention rate presented in the graphic, whether
retention rates for other
cohorts similarly deviate, and why you believe the average retention
rate provides
investors with information necessary to understand the retention rate
and its overall
impact on your business.
Buyer Acquisition Costs and Lifetime Value , page 70
19. Please briefly define "retention marketing costs."
20. We note your use of the 2017 cohort to illustrate the efficiency of
our buyer acquisitions.
We also note your disclosure that "[o]ur increasing LTV to BAC ratio
demonstrates that
we establish long-lasting relationships with our buyer cohorts and
drive increasing value
over time." To provide investors with context regarding how your LTV
to BAC ratio is
"increasing," amend your disclosure to provide LTV to BAC data for
other recent
cohorts.
21. Please explain the reasons for the substantial growth in new active
buyers from the third
quarter of 2020 to the fourth quarter of 2020, to the extent possible.
Please also explain
whether you believe the spike is due to unique circumstances during
this time period or is
representative of a material trend in new active buyers.
Diversify Product Verticals , page 71
22. We note your disclosure that "[h]istorically, our largest vertical by
GMV has been antique
and vintage furniture," and that "[w]e expect antique and vintage
furniture to account for
less than 50% of on-platform GMV for the foreseeable future." Please
clarify whether the
historic percentage of GMV attributable to antique and vintage
furniture has been less
than 50%, and if not, why you do not expect this trend to continue for
the foreseeable
future.
Notes to Consolidated Financial Statements
Note 2. Summary of Significant Accounting Policies
Revenue Recognition, page F-15
23. You state revenue is recorded either gross or net of costs associated
with the transaction.
Based on the description in the filing of your business model, it
appears you arrange as an
agent for goods or services to be provided by sellers to buyers
participating in your
FirstName LastNameDavid S. Rosenblatt
marketplace for which revenue would be recognized on a net basis. Please
provide us
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withName1stdibs.com, Inc. in which you recognize revenue on a gross
basis and your
examples of transactions
March reasoning why 5such treatment is appropriate.
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1stdibs.com, Inc.
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24. You disclose you record discounts provided to the end buyer in selling
and marketing
expense since the discounts are not related directly to your revenue
source. It appears the
discount would not be incurred by you without your revenue source
represented by the
sale transaction by your customer (the seller). It also appears the
end buyer benefits from
the marketplace service you provide to your customer. In view of the
preceding, please
explain to us your consideration of ASC 606-10-32-25 through 27 with
regard to your
treatment.
25. You disclose here listing fees are recognized when the listing is
publicly posted. In
"Critical Accounting Policies and Estimates," you disclose the listing
fee is recognized
ratably over time when the listing is publicly posted. Please clarify
in the note: (i) when
the listing fee is received; and (ii) whether the listing fee is
recognized ratably and if so,
the time period over which recognized and the basis for that period.
You may contact Patrick Kuhn at (202) 551-3308 or Doug Jones at (202)
551-3309 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Katherine Bagley at (202) 551-2545 or Erin Jaskot at (202) 551-3442
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Trade & Services