ContextLogic Inc., the parent company to mobile e-commerce platform Wish, has filed for an initial public offering amid a massive shift to online shopping during COVID-19.
With 586.4 million Class A and Class B shares expected to be outstanding after the IPO, the pricing could value the company at up to $14.07 billion.
Lead underwriters include Goldman Sachs & Co., JPMorgan and BofA Securities.
With 100 million monthly active users in more than 100 countries, Wish /zigman2/quotes/223233051/composite WISH -0.36% says it is the most downloaded shopping app, and aims to bring its users a wide selection of affordable products. Wish has more than 500,000 merchants selling 150 million items to customers. About 1.8 million items are sold daily.
ContextLogic was incorporated in Delaware in 2010 and is based in San Francisco. It will trade on the Nasdaq with the symbol “WISH.”
ContextLogic’s chief executive and chairperson is also its founder, 39-year-old Peter Szulczewski. Prior to launching the company, he held a number positions at Google Inc. /zigman2/quotes/205453964/composite GOOG +0.52% /zigman2/quotes/202490156/composite GOOGL +0.45% Others among the executive leadership have also previously held positions at technology companies, including Chief Financial Officer Rajat Bahri, who was previously at Jasper Technologies, and General Counsel Devang Shah, who worked at Zynga Inc. /zigman2/quotes/209662259/composite ZNGA +3.48%
As of Sept. 30, ContextLogic had 828 full-time employees across eight companies, 417 of which are in research and development or related activities.
The mobile commerce market was $2.1 trillion in 2019 and is projected to reach $4.5 trillion by 2024, according to the Wish prospectus. As consumers make the shift to e-commerce during the coronavirus pandemic, experts like Adobe Inc. /zigman2/quotes/200389143/composite ADBE +0.09% have seen mobile sales leap during the holiday season.
More than 90% of the user activity and purchases on the Wish platform are on the mobile app.
E-commerce has traditionally focused on affluent shoppers. However, growth will come from consumers on the lower end of the economic spectrum, Wish said, particularly among the shoppers from emerging economies across Africa, Latin America and Eastern Europe, where they approximate the average household income at $18,000 annually. Excluding China and India, the company estimates that there are more than 1 billion households globally with income of less than $75,000 a year.
“We believe that the next billion e-commerce customers will be these value-conscious consumers,” the prospectus said.
Wish revenue has grown from $1.1 billion in 2017 to $1.9 billion in 2019. For the first nine months of 2020, sales totaled $1.7 billion. Marketplace services make up the majority of revenue (93%). The company also offers an advertising tool, ProductBoost, which allows merchants to promote their listings on user feeds.
“The largest e-commerce companies in the world were created on desktop, and their consumer experiences are predominantly search-driven rather than discovery-based,” the Wish prospectus said.
Among the biggest e-commerce companies are Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN -0.45% , Shopify Inc. /zigman2/quotes/209033712/composite SHOP -0.12% and Alibaba Group Holding Ltd. /zigman2/quotes/201948298/composite BABA -0.53% , all companies that Wish identifies as competition. Wish also says it’s competing with discount retailers like Walmart Inc. /zigman2/quotes/207374728/composite WMT +1.02% and Dollar General Inc. /zigman2/quotes/200691429/composite DG -0.73% and off-price retailers like TJX Cos. /zigman2/quotes/203136811/composite TJX -1.69%