Zappos earned $10.7 million last year on $635 million of net revenue, an improvement over 2007, when it made $1.8 million on $527 million of net sales. In the first quarter of this year, the company made a $221,000 profit on $144 million of net revenue — an 8.4% year-over-year growth in sales. Those are the “wafer thin” margins Wall Street was expecting, given Zappos’ liberal return policy and free shipping.
Still, a great brand, a solid deal, and an opportunity for Amazon’s massive size to drive growth — and bargaining power — to Zappos.
Meanwhile, TechCrunch’s Sarah Lacy scoured Amazon’s SEC filing and figured out that Zappos’ founders Tony Hsieh and Alfred Lin got rich off the deal, especially CEO Hsieh.
CEO Hsieh owns 29.4% of the common shares, CFO Lin owns another 2.7% and Venture Frogs– the firm they started and jointly manage– owns another 39.9% of the shares.
Sequoia owned 22% of the company, but made different returns depending on the liquidation preferences in each term sheet. In all, the firm is poised to make a return of roughly $160 million, based on Amazon’s closing price today. Sequoia invested $35 million over the companies E and F rounds. Not bad.
It’s much harder to see how much Hsieh and Lin are making, because no one knows how much of the proceeds of the Venture Frogs shares goes to their pockets or to their LPs. But they clearly did well. Hsieh made at least $214 million; Lin made at least $18 million, with the Venture Frogs shares netting an additional $163 million. If that’s a forced sale, the two are crying all the way to the bank.
Business Insider Emails & Alerts
Site highlights each day to your inbox.