Stitch Fix has confidentially filed for an IPO

Stitch Fix has filed confidentially for an initial public offering, setting itself up for another big test for the IPO market in the near future, sources tell TechCrunch.

While we don’t know exactly when Stitch Fix will go public, we do know that a handful of companies are planning to go between Labor Day and Thanksgiving. Stitch Fix only recently hired its CFO, Paul Yee, in June — so it’s possible that they will push this a little further out. This marks the official beginning of the process ahead of the S-1 filing where the company will formally disclose its financials. Startups are allowed to file confidentially for IPOs under the JOBS act signed in 2012, allowing them to test the waters prior to formally releasing their company’s inner workings.

Stitch Fix will also mark one of the big tests for modern e-commerce startups and their viability as public companies. Stitch Fix gathers information about your personal style and delivers articles of clothing to your door, allowing you to pick which ones to buy and which to return. It’s an area that’s become increasingly populated with competition, the largest of which is possibly Amazon with its recent launch of Prime Wardrobe.

A representative from Stitch Fix declined to comment.

Stitch Fix is part of a wave of subscription styling startups that have adopted the try-it-before-you-buy-it approach. Le Tote is also competitive in the space and Rent the Runway has been rolling out its “Unlimited” subscription. There’s also MM. LaFleur for professional women, Dia & Co for plus size and Rocksbox, which is jewelry only. The model works well for busy people who want to test out the latest styles and only keep their favorites.

But one challenge that Stitch Fix may face as a public company is it might be hard to predict revenue. Some subscription businesses, like we saw with Blue Apron, have struggled with customer retention. The filing will additionally tell us if users are purchasing enough items to offset the customer acquisition costs.

Stitch Fix was founded out of CEO Katrina Lake’s apartment in Massachusetts in 2011, initially focusing on women’s clothing. Part fashion startup, part tech startup, Stitch Fix has morphed into a massive e-commerce startup and is a big success story for Lake in the midst of a lot of competition. The last round Stitch Fix raised was in June 2014, with a post-valuation of $309.31 million, according to data from PitchBook. The startup, which has raised $42.5 million from investors like Benchmark, was widely pegged for an IPO this year.

It will, indeed, be a test for Stitch Fix. After a hot start, consumer IPOs have not done so well in public markets as we pass the midpoint of 2017. Snap debuted with an aggressive pop but shares have since continued to hit record lows. Blue Apron, too, has seen a sharp decline following — no surprise — Amazon’s looming entry into meal kit delivery. It’s not clear if investors will see whether Stitch Fix faces the same dilemma as Blue Apron with the threat of Amazon. Still, Stitch Fix has a strong brand, and may fare better as a different kind of startup going public.

Most recently, Recode reported that Stitch Fix’s filing could be imminent, and in May Reuters reported that the startup tapped banks for it initial public offering. The company’s COO also left ahead of the IPO, according to that Recode report. TechCrunch can now confirm that the company has filed confidentially.

Stitch Fix’s next steps will be to publicly release the information, and 15 days later begin the “road show,” where it will pitch the company to investors ahead of its public debut.