According to the Oct. 24 filing for its parent company ContextLogic, the company has authorized new shares to be sold, although the size of the round, investors, and valuation are not disclosed.
A person familiar with the round told Business Insider that’s the round is almost closed and could be announced within the next few months. The capital will be going toward shortening delivery times and improving discovery on the Pinterest-like site.
The Delaware filing does include a nice deal sweetener, however.
A provision in the Delaware filing cites that investors in the current get special liquidation preferences. That means if Wish sells for less than it’s valued in this round, the latest investors will get all of their investment back before any earlier investors see a penny. It basically limits the downside for this round of investors.
These types of preferences are not uncommon, but are a concession by the company – Wish wouldn’t offer these terms if it didn’t think it was necessary to raise these funds.
The filing also sets conditions on an IPO, saying that preferred shares held by investors only convert to common shares if the company raises at least $500 million at a $6 billion valuation.
Wish has been described as the e-commerce company Fab was supposed to be. It sells cheap but stylish products by optimizing social channels like Facebook and Instagram. The result is super cheap products, like $9 dress shirts or a $15 smartwatch, that often take weeks to deliver.
The company has reportedly previously raised close to $600 million and been valued at $3 billion or more by investors. But it hasn’t gotten much press because CEO Peter Szulczewski doesn’t want or need any. When we first reached out to Szulczewski, in December 2014, he wrote that he was “humbled and a bit surprised” to find himself on Business Insider’s radar, since he and the company “try to keep a very low profile.” Last year, Recode reported that the company was spending over $100 million on Facebook ads, making it one of the social network’s largest advertising customers.