Source: General Atlantic to invest $200M in Squarespace, to be used for stock buybacks, at a $1.7B valuation; CEO says firm has $300M annual revenue, up 50% YoY
$200 million will mostly go toward cashing out early backers — Website builder generated $300 million in revenue this year Thanks: @tsgiles
Context & Ripple Effects
In December 2017 Squarespace was a profitable-looking private company: $300M in revenue growing 50% year over year per its CEO, valued at $1.7B. General Atlantic's $200M check was structured mostly as a buyback, meaning early backers got liquidity years before any listing rather than through an IPO.
That $1.7B mark became the reference point for everything after: Squarespace's confidential IPO filing three years later preceded a $300M raise at a $10B valuation, yet when shares finally traded the company debuted around $5.9B — below its last private mark — before Permira eventually took it private in a deal raised to $7.2B.
First-order effects
- Early Squarespace shareholders get cash liquidity now via the buyback, while General Atlantic takes a large position at $1.7B — a price the 2021 private round would value at nearly 6x.
Second-order effects
- With $300M in revenue and fresh capital earmarked for insiders rather than operations, pressure to list imminently eases — consistent with the company waiting until January 2021 to file confidentially.
Third-order effects
- The episode previews the modern late-stage cycle: private rounds doubling as exit liquidity extend the stay-private runway, and when public markets discount the last private mark — as the ~$5.9B debut against a $10B round showed — sponsors like Permira step in as the eventual clearing mechanism.
The trend: Late-stage private capital increasingly substitutes for public markets as the liquidity venue for scaled internet companies, setting valuations that both IPO debuts and subsequent take-privates must reconcile.