Is Warby Parker A Publicly Traded Company?

Warby Parker is one of the trendiest ecommerce companies to rise from the 2010s. The company was founded in Philadelphia by Wharton School of the University of Pennsylvania students before moving headquarters to New York City.

In the decade after its launch, the company raised $56 million from investors and was valued at $1.2 billion in April 2015 and $3 billion by August 2020. This is after a new funding round in which it raised $245 million from investors including D1 Capital Partners, Durable Capital Partners, and T. Rowe Price.

The company was widely believed to be a candidate for an initial public offering (IPO) in 2020. Instead, it chose to remain private, while brands like Airbnb (ABNB), DoorDash, and Wish made headlines for their public stock launches.

On top of this, it reported profitability as early as 2018. This timeline since inception beat unicorns like Uber and could be a sign it’s not just another flash in the pan. But Warby Parker is operating in a market dominated by one well-known name: Luxottica.

Is Warby Parker Owned by Luxottica?

Luxottica is the whale of the eyewear industry, with a portfolio of brands that includes the likes of Ray-Ban, Oakley, Persol, Oliver Peoples, and more. It also licenses high-end fashion houses like Burberry, Armani, Chanel, Dolce&Gabbana, and Prada.

On top of this, it owns EyeMed Vision Care, a vision benefits company, Sunglass Hut, LensCrafters, Pearle Vision, and Target Optical. This makes the vertically integrated company a $49 billion industry juggernaut that easily stomped on its competition.

However, it doesn’t own Warby Parker, and a $3 billion valuation means institutional investors have a lot of faith in this tech-based retail startup. It’s flexing its large online presence and small retail footprint to sell direct to consumers and become vertically integrated itself.

On top of its own brands, the company has partnerships with Nordstrom and had 90 brick and mortar locations when the pandemic hit.

Is Warby Parker a Publicly Traded Company?

Warby Parker was pegged by analysts for a 2020 IPO, and the landscape seemed ripe for it. However, the company instead sought another round of private investment.

The company’s investment rounds were:

·       $2.5 million May 2011.

·       Series A Round $12.5 million September 2011.

·       Series B Round $37 million Fall 2012.

·       Series E Round $75 million March 2018.

·       Series F Round $245 million August 2020.

By not going public, Co-CEOs Neil Blumenthal and David Gilboa are free to make their own decisions. They have proven their value by generating $250 million revenue in 2019. By comparison, Luxottica grossed over $10 billion in the same year, making Warby Parker a relative guppy in the ocean.

Still, its $3 billion valuation is nothing to sneeze at. It’s much more than competitors like Ambr Eyewear and EyeBuyDirect that mimic the company’s successful sales strategy. The coronavirus pandemic only accentuated the need for such direct-to-consumer brands.

And mergers and acquisitions could make Warby Parker even more attractive to investors.

Consider if Warby Parker merged with an online platform like Poshmark or even lands an exclusive deal with major retailers like Walmart (WMT) and Costco (COST). These types of moves would cement the company’s status as the Redbox to Luxottica’s Blockbuster.

But brand recognition is strong, and you won’t be killing Ray Bans or Oakley’s diehard fanbase off anytime soon. Meanwhile, there are advancements in AR-enhanced smart glasses that could change everything.

Is Warby Parker a B Corp?

If it’s not a publicly traded company, you may wonder what type of company Warby Parker is. It was a B Corporation for the first 8 years of its existence, meaning it balanced profit and purpose to meet the general legal requirements.

However, in 2018 both Warby Parker and Etsy (ETSY) chose to decertify their B Corp status. This would make the company adhere to stakeholder wishes. It converted to a C Corporation in Delaware due to complicated laws.

This doesn’t mean the company isn’t still dedicated to purpose. It builds meaningful relationships with customers while being transparent about its supply chain. It’s a socially responsible company that markets itself as 100 percent carbon neutral with its 1,400 employees.

In fact, customers often rave about Warby Parker’s quality and reliable service. Both the frames and the experience are given top ratings because customers can try frames on at home before buying. You pick five frames, they mail them, and you keep the ones you like.

This may make you wonder how the company pulls off such great prices.

How Can Warby Parker Be So Cheap?

Warby Parker seems cheap on the surface. Glasses start at $95 for frames and lenses. Lenses are scratch resistant and guaranteed with a one-year replacement guarantee. They also have anti-reflective coating, UV protection, and Superhydrophobic coating. All of this is free.

It seems like these add-ons would add to the price, but the average markup on eyeglasses is 250 percent. That means the company has plenty of wiggle room to create a value while also still making great margins.

Also keep in mind $95 is the base price. It goes up from there, and like Luxottica, style and fit are all that matters to most consumers. It has lookalikes of all popular styles and unique styles of its own. By being vertically integrated, the company can afford to spend on customer retention.

With its products so popular, some companies may be interested in acquiring Warby Parker.

Will Warby Parker Be Acquired?

Warby Parker staff hasn’t expressed any interest in an exit strategy, and it’s more likely to go public than be acquired. It’s definitely an attractive buy to any number of companies though.

Luxottica is used to strangling competitive companies like Oakley and acquiring them, but it won’t be so easy with Warby Parker.

Instead, keep an eye out for a Warby Parker IPO in the 2020s. This coming year could be a turbulent one for tech stocks, and IPOs like DoorDash are lauded by critics as too expensive. If the tech bubble bursts, Warby Parker could rise from the ashes by showing continued profitability and growth.

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