Etsy Announces Millions In Financing For ExpansionBy: Amanda Crum - May 9, 2012
In an interesting move by DIY giant Etsy, the company announced today they will be raising cash via venture financing to the tune of $40 million.
While this wouldn’t be considered huge news for most other companies, the fact that Etsy is a do-it-yourself brand focused on handmade products makes it a big deal…especially when you consider the recent scandal involving the site and their legitimacy.
The site was initially a place for crafters of handmade items to open an online shop without the fear of being overshadowed by big corporate sellers and resellers; a safe haven for the little guy, if you will. But in the past year, several stories have been brought to light by sellers who have found items similar to the ones they sell–everything from jewelry to furniture–being sold on the site by resellers who post the items as “handmade”. Adding salt to the wound is Etsy’s reported refusal to shut down those shops, instead making the legit mom-and-pop shops go through miles of red tape to prove the provenance of their wares.
“It bothers me a little that I was rejected from selling on Etsy because I have a team of workers helping me build my custom designed hand made wood furniture and crafts at Glenn Furniture. Every piece of furniture I build has me involved from the design to inspecting the construction to finishing. But I was rejected from Etsy because 100% of the work is not done by my hands. Yet they allow other people to sell that had nothing to do with the construction what so ever,” said Etsy seller Glenn Madden in reference to a WebProNews article.
Chad Dickerson, Etsy’s chief executive since last summer, says the move for financial backing is not motivated by a lack of funding for operational costs, but rather to help open offices in other countries such as Australia and Canada.
“There’s a huge opportunity for Etsy to grow the opportunities for sellers,” he said.
Nevertheless, this news won’t do much to ease the minds of those sellers who are unhappy with the company, as many may see it as a big leap towards becoming a huge corporation. A rather large group protest is scheduled for tomorrow against Etsy because of the reseller debacle, and many shops will be closing down on the site to show their support. This news could only add fuel to the fire.