Niraj Shah and Steve Conine launched Wayfair in 2002. The retailer did $3.38 billion in revenue last year.

(Bloomberg) — The once frugal founders of Wayfair Inc. have become billionaires after a revenue surge helped the online retailer’s value rise to a record.

Investors embracing the company’s expansion strategy pushed the stock to a record high last week, giving co-founders Niraj Shah and Steve Conine each a net worth of $1.37 billion as of noon Wednesday in New York, according to the Bloomberg Billionaires Index.

Together they hold 40% and nearly all voting rights for the online seller of sofas, beds couches and other home furnishings — a reflection of the thrifty approach they pursued for almost a decade as they spurned outside capital.

“I probably spent three years bugging Niraj to take my money,” said Alex Finkelstein, a venture capitalist at Spark Capital who led a $165 million investment round in 2011 and served on Wayfair’s board until 2015. “They built the company to an incredible scale without raising money. They didn’t need to as they always ran it profitably.”

Shah, 43, and Conine, 44, declined to comment on their wealth.


Wayfair, No. 16 in the 2017 Internet Retailer Top 500, shares have more than doubled this year, the best performance by far in the 97-company S&P Retail Select Industry Index, which includes Inc. (No. 1).

Shah and Conine, who met at Cornell University and studied engineering, founded Wayfair in 2002 and stitched together a network of more than 250 standalone websites, including and Almost a decade later, they began to consolidate the sites into a single domain and set out to build brand awareness. To pay for it, they raised $351 million in venture funding in 2011 and about $283 million in an initial public offering three years later.

Wayfair’s revenue has more than quintupled since 2012 to $3.38 billion last year, while its net loss more than doubled from 2015 to $194.4 million as the company increased spending on advertising, infrastructure and international expansion. Analysts surveyed by Bloomberg predict Wayfair will post additional losses this year and next before approaching break-even in 2019.

The quest for revenue has produced a vocal cohort of skeptics who question whether Wayfair’s business model can ever result in profits. Bearish bets on the company account for 24% of the publicly traded float, making it the 145th most shorted stock in the Russell 2000 Index.

‘Still Short’


“I’m still short Wayfair,” Citron Research’s Andrew Left said in an interview, arguing that the retailer is simply buying growth. “They are showing no path toward profitability whatsoever.”

Left also suggests that Jeff Bezos’s Amazon may enter the market, and Furniture Today reported in April that the online retail giant may change its furniture-selling platform so that stores can offer custom delivery services at different prices.

“Amazon could be a big threat and might easily take away shoppers as anybody who’d shop on Wayfair is likely already an Amazon customer,” said Seema Shah, an analyst with Bloomberg Intelligence. “Bezos is a threat to everybody.”

Shah and Conine, who have more than 95% of their personal fortunes tied to Wayfair, remain undaunted, arguing that the furniture category is protected against Amazon’s advance.

“We are pretty bullish that the investments we’ve been making are working,” Shah said on a May 9 conference call with analysts. “There’s still a lot of those gains ahead of us.”


Wayfair was honored with a 2017 Internet Retailer Excellence Award as the E-Retail Marketer of the Year.