John W. Robertson
T: +1 206 452 8763
jrobertson@cooley.com
November 1, 2013
U.S. Securities and Exchange Commission
Division of Corporate Finance
100 F Street, N.E.
Washington, D.C. 20549
Attn: Mara L. Ransom
| RE: | zulily, inc. |
Amendment No. 2 to Registration Statement on Form S-1
Filed October 25, 2013
File No. 333-191617
Dear Ms. Ransom:
On behalf of zulily, inc. (“zulily” or the “Company”), we are submitting this letter and the following information in response to a letter, dated October 31, 2013, from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) with respect to the Company’s Amendment No. 2 to the Registration Statement on Form S-1 referenced above (the “Registration Statement”). We are also electronically transmitting for filing Amendment No. 3 to the Registration Statement (the “Amendment”). We are also sending the Staff a hard copy of this letter and the Amendment, including a version of the Amendment that is marked to show changes to the Registration Statement.
The numbering of the paragraphs below corresponds to the numbering of the comments in the letter. For the Staff’s convenience, we have incorporated your comments into this response letter in italics. Page references in the text of this response letter correspond to the page numbers in the Amendment. Capitalized terms used in this letter but otherwise not defined herein shall have the meanings ascribed to such terms in the Amendment.
Common Stock Valuations, page72-77
| 1. | Please explain to us, with a view toward disclosure, the rationale for the ramp-up in weighting methods to arrive at differing computations of equity value from an initial market/income approach at 75/25 percent, respectively at March 2013 to a market andincome approach weighting of 15 percent and probability-weighted expected return method of 85 percent at September and October 2013. |
1700 SEVENTH AVENUE, SUITE 1900, SEATTLE, WA 98101-1355 T: (206) 452-8700 F: (206) 452-8800 WWW.COOLEY.COM
U.S. Securities and Exchange Commission
November 1, 2013
Page Two
In response to the Staff’s comment, the Company has revised the disclosure to provide more context for the shift in weightings between the option pricing method (following a determination of enterprise value under the market/income approach) and the PWERM during the period from March 2013 through October 2013. As disclosed, the relative weighting between the “market approach” and “income approach” in the option pricing model allocation methodology has not changed over this period. What has changed is the relative weighting between the option pricing method (following a determination of enterprise value under the market/income approach) and the PWERM. As disclosed, as an IPO began to become a possible near term outcome, the Company began to allocate a greater relative weighting to the PWERM as this is the methodology that most closely correlates with the expected valuations of the Company in an IPO. The heavier weighting of the PWERM results in a higher fair value of common stock, especially when the probability of an initial public offering is increased.
Please contact me at (206) 452-8763, Eric Jensen of Cooley LLP at (650) 843-5049 or Michael Tenta of Cooley LLP at (650) 843-5636 with any questions or further comments regarding our responses to the Staff’s comments.
Sincerely,
/s/ John W. Robertson
John W. Robertson
Cooley LLP
| cc: | Darrel Cavens, zulily, inc. |
Marc Stolzman, zulily, inc.
Deirdre Runnette, zulily, inc.
Eric Jensen, Cooley LLP
Michael Tenta, Cooley LLP
Michael Nordtvedt, Wilson Sonsini Goodrich & Rosati, P.C.
Lynnette Frank, Deloitte & Touche LLP
1700 SEVENTH AVENUE, SUITE 1900, SEATTLE, WA 98101-1355 T: (206) 452-8700 F: (206) 452-8800 WWW.COOLEY.COM
