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The Wix IPO – The Case From a Growth Perspective

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Wix.com is a leading do-it-yourself website development platform. It was founded in Israel in 2006 and has since emerged as a global leader in the space. Wix filed for its IPO and started trading publically on November 6th 2013, giving every investor the opportunity to be a part of the company. This post explains part of why I feel Wix is a great investment opportunity. As always, my posts are my personal opinions and are not reflective of any companies that I work with. Additionally, my opinions are not portfolio advice.

The executive summary (the short read).

  • Internet connectivity throughout the world is still growing tremendously.
  • The number of websites created is growing at an even greater rate.
  • Wix has penetration in the right areas, globally.
  • Invest in Wix.

The full story:

Internet development

Internet growth is booming. While the internet may seem like old news to many people in developed regions, most of the world is not yet connected. For many places in Latin America, Africa, and Asia the internet is a new arrival. With the addition of programs like Google Loon and the explosion of smartphone accessibility, more and more people will continue to get connected.

internet-penetration.003

Website development

While the number of people that access the internet is expanding, the number of people creating websites is growing at a greater rate. Notice the green line below, which shows the number of web users divided by the number of websites. The lower the green line goes, the more websites per user that are being created.

internet data projected copy

Data for the above HERE & HERE

Market penetration

Wix sees terrific market penetration in areas that have some of the best room for growth. Below is a google trends results for Wix based on country. You can see that the top 5 results all fall into the areas where there is currently less than 50% internet penetration by population (the first graph). This shows how Wix will lead the way in areas where the internet will see some of the most explosive growth in the next 5 years.

Screen Shot 2013-11-06 at 2.54.12 PM

Invest in Wix

This space will continue to explode. There are many ways to look at the investment in Wix. I have put forward an argument based on the fact that the internet is growing all over the world, with an even higher percentage of people making their own websites. Jeff Epstein, former CFO of Oracle and Bessemer partner, told a Stanford MBA class that he recommends getting involved in industries that will see 10X growth. He said that by the fact that you are involved in an industry with that much growth, your odds improve for being wildly successful. See the video HERE.

Personal disclosure

For disclosure, I personally hold a long position in Wix. I invested in the first hour of trading 11-6-13 when Wix went public. I was thrilled by the opportunity. I had tried to invest in March 2012 but didn’t get too far back then… With partners like Bessemer, Mangrove, and Benchmark, Wix has been sufficiently funded during its life as a private company.

Screen Shot 2013-11-06 at 12.43.37 PM

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James Murphy is an entrepreneur, avid boater, and philanthropist. He looks to take on projects of integrity that are working to make a difference in the world. He is an investor, board member, and blog contributor of EquityNet. Visit his Google+ profile HERE or visit some other projects he is proud of: DrPerlmutter.com, EquityNet.com, SlideMoor.com, LEVEFoundation.org, SitwayenDevelopmentGroup.com, ProtonEnterprises.com

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  • http://www.equitynet.com/ Adam Vanderbush

    I think Wix will do well. As a web marketer, I prefer a more robust toolset for website building. However, Wix does a great job at making it super easy to make a quality and well-designed website. This will be critical for the market angle they are approaching. They also understand and execute web marketing principles well, helping themselves and their customers grow at the same time.
    Disclosure: I have a small holding in Wix. My opinions are not portfolio advice.

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    James, great post! Looking forward to more of your submissions.

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