Spring, formerly known as Teespring, was one of the first companies to offer a way for social media creators to sell custom merchandise like hoodies, phone cases and hats to their fans. Its focus on creator-customized products has been paying off. After 53% growth last year, the company expects to generate $165 million in revenue this year.
CEO Chris Lamontagne said in an interview that the startup is targeting an initial public offering within the next 18 to 24 months. The company, which has raised an estimated $60 million from investors including Andreessen Horowitz and Khosla Ventures, has been profitable on an EBITDA basis, a measure of profitability that strips out costs like taxes, since 2018, he said.
Launched as a site for consumers to design and sell custom t-shirts, the nine-year-old company started gaining momentum as small entrepreneurs started to flog custom ware to niche audiences, often found on Facebook. The startup has spent recent years shifting toward creators and more digital products, such as online courses, photo filters and one-of-a-kind collectibles known as NFTs. Some 7.7 million creators have signed up for its service, the company says, and digital products will represent one-third of all revenue.
A major turning point for the business came before the pandemic, when it signed a deal in 2018 with YouTube that let creators link to custom products designed and sold through Spring via a Store tab on a YouTuber’s account. Their custom merchandise is also shown below videos. Spring has similar deals with other social networks, including TikTok and Twitch.
Spring, which handles the ordering, shipping and fulfillment of merchandise, sets the base price of products, and then the creator chooses the retail price, based on how much they think fans will be willing to pay. For example, if a t-shirt’s base price is $10, and the creator charges $30, the creator would earn $20 when the shirt is sold, while Spring keeps the base fee. It’s unclear what cut social networks get.