Founder and CEO Katrina Lake is the first woman to take an internet company public this year.
On the day Stitch Fix publicly filed paperwork for its long-awaited IPO, Glossier CEO Emily Weiss had a simple message for the company’s 34-year-old founder and chief executive, Katrina Lake.
So too did Rent the Runway’s co-founder and CEO Jennifer Hyman.
The Stitch Fix and Katrina Lake success story — building a nearly $ 1 billion revenue business with profitability in less than six years — has impressed people all across the tech and retail worlds. But today’s IPO milestone has added meaning for some female founder-CEOs of internet companies who know first-hand the obstacles women still face in an industry dominated by male investors and CEOs.
“I want her to have a huge positive outcome because it does something really important for female entrepreneurs and, specifically, founder-CEOs,” Rent the Runway’s Hyman told Recode in an interview on Thursday. “I want her to have this success because we work in an industry where pattern recognition is still the name of game. So the more people like Katrina — and hopefully people like myself — who deliver results, the more other women are going to get opportunities.”
The Stitch Fix IPO is the first public offering this year of an internet company run by a woman. It also appears to mark the first time a female founder-CEO has taken a consumer internet company public since Care.com started trading on the New York Stock Exchange nearly four years ago.
“I admire Katrina not just because she is a female founder-CEO who has built a huge and impactful business in a very short amount of time, but also because she has done it in a very capital-efficient way,” Shan-Lyn Ma, the co-founder and CEO of the online wedding registry startup Zola, wrote in an email to Recode. “It shows us all that there is an alternative path to an IPO than the typical ‘burn money to buy growth’ path to IPO.”
That view was echoed by Eurie Kim, a partner at Forerunner Ventures, who was not an investor in Stitch Fix but who has followed the company closely.
“What’s most notable about the story is that Katrina only raised $ 42 million and was able to lead the business to profitability early, all the while growing revenues at record pace,” Kim said in an email. “That is a true success story that I think will certainly motivate founders, specifically female founders, to take the leap in bringing their ideas to life and be even more ambitious about the full potential that can be achieved with visionary leadership and disciplined execution.”
Lake founded Stitch Fix in 2011 with a new retail model of bringing a personalized shopping experience into the homes of women who didn’t have access to a wide range of fashion options near them or didn’t have the time to shop around. It resonated big-time and, today, the company has around two million active customers.
Stitch Fix’s early investors have also credited Lake with having the vision and capability to hire high-level talent into important roles early on. The company’s current management team includes top executives from Netflix, Walmart and Nike who all joined Stitch Fix back in either 2012 or 2013.
“[T]he thing that leads to really big home runs are the entrepreneurs that have the audacity and capability to go recruit high to build a team,” Bill Gurley, the Benchmark venture capitalist who sits on Stitch Fix’s board of directors, told Recode in 2015. “You’ll hear entrepreneurs say they want to hire people who are smarter than they are, but some of them are intimidated and some of them just can’t close.”
The path forward as a public company will come with more obstacles, though. Stitch Fix priced its IPO at $ 15 a share on Thursday night, well below its target of $ 18 to $ 20. It opened up trading on Friday at $ 16.90 a share, giving it a market value of $ 1.6 billion.
Potential public-market investors reportedly had questions about the company’s decelerating growth and why it needs to employ so many stylists if its algorithms are supposed to be a styling differentiator.
“I think there’s always a learning process that public markets and investors will have,” Hyman said on Thursday, before the IPO price was set. “But I hope that the Stitch Fix story, wherever it starts on Day Zero, continues to go up to the right over the next 18 months as she educates the market and they see how great a business she has built.”
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