And the company didn't raise as much money as it had been hoping for. It raised $120 million, after pricing at $15, below the expected range of $18 to $20. The company also reduced the size of its IPO.
Stitch Fix markets itself as an affordable fashion stylist. Customers are able to order boxes designed to fit their measurements and style preferences.
Users can opt to purchase favorite items and send back the rest. The boxes can be ordered on a subscription basis or on the customer's whims.
The bull case for Stitch Fix is that it's been able to grow to $977.1 million in annual revenue in just six years since it was started by CEO Katrina Lake. This is up from $730.3 million in fiscal 2016 and $342.8 million the year before. The top line is growing fast.
It's also achieved profitability in some years, although it turned to a small loss of $594,000 for 2017. Last year saw $33.2 million in net income.
But it's also a very competitive landscape. Others in the category include Le Tote, Trunk Club,Wantable, Boon + Gable and Dia & Co. Rent the Runway has also been rolling out subscription boxes and Rocksbox has a similar model for jewelry.
And it's competing with malls and other online retailers. While consumers increasingly enjoy the convenience of having items sent to their home, Amazon and others in the e-commerce world have made it easier than ever to find customized fashion.
It also may be hard to predict growth, an important task for public companies, which are expected to provide investors with quarterly updates.
Stitch Fix users can order boxes on-demand and it's hard to say whether users will order with consistent frequency. It's also difficult to determine how many items they will opt to buy.
But it's undoubtedly a win for Baseline Ventures, which owned 28.1% of the company prior to the IPO. Benchmark Capital Partners owned 25.6% and Lightspeed Venture Partners owned 11.8%.
Over the summer, TechCrunch broke the news that Stitch Fix had filed for IPO.
- This article originally appeared on TechCrunch.