Better not get on Angie's bad side -- she's got a list. Angie's List provides consumer ratings on companies in the service industry. Consumers rate local providers in more than 550 business service categories, including roofing, plumbing, home remodeling, and doctors. The company has amassed a collection of some 2.2 million reviews, receiving about 40,000 new reviews each month from consumers in 175 markets across the US. Revenues come from ads and subscription fees. Angie's List has more than 1 million paying members who access ratings and reviews via AngiesList.com and Angie's List Magazine. The firm was founded by Angie Hicks and Bill Oesterle in 1995. It filed to go public in 2011.
Angie's List joined the current spate of Internet public offerings, which include buzzed-about companies such as LinkedIn and Groupon. It raised some $114 million in the offering, which it is using to fund its advertising strategy and for general corporate purposes. The company intends to deepen its market penetration, particularly in New York City and Los Angeles, as well as expand into new categories. The IPO adds to prior funding efforts; so far it has raised nearly $100 million from investment firms such as Battery Ventures, T. Rowe Price, City Investment Group, and Cardinal Ventures.
Though Angie's List is in major growth-mode, the company has yet to earn a profit. In 2010 revenues were $59 million, and the company reported a net loss of about $27 million. The loss is mostly due to its strategy of expansion by investing on major national advertising campaigns; such marketing costs totaled about $30 million in 2010.
While spending big on advertising its own services, the company receives a majority of its revenues from other advertisers. Members grade service providers on an A to F scale, and Angie's List allows businesses that average an A or B rating and at least two current reviews to advertise by providing discounts to members. Angie's List earns about 57% of revenues from the sale of advertising to service providers; the remaining 43% of revenues come from subscription fees.
Board members John Chuang and Steven Kapner own about 20% of Angie's List through their positions at venture capital firm TRI Ventures. Angie Hicks founded the company as a result of her frustrations in finding reliable contractors in suburban Columbus, Ohio. – less