This morning, Wish, a prominent mobile commerce company, submitted its initial public offering (IPO) paperwork. This follows similar filings this week from Affirm, Airbnb, and Roblox, as numerous highly-regarded private companies seek to launch on the public market before the end of the year and the holiday season.

Wish’s S-1 filing, registered under the corporate name ContextLogic, is particularly noteworthy considering the impact of COVID-19 and the worldwide pandemic on consumer habits throughout 2020. As in-person shopping became increasingly precarious, a significant number of consumers shifted towards online purchases, which benefited e-commerce platforms such as Shopify and BigCommerce, and companies specializing in online payment processing, including Square and PayPal.

What effect did the pandemic have on Wish? It seems to have spurred its expansion.

Examining past performance, Wish experienced a deceleration in revenue growth during 2019, before demonstrating a substantial increase in 2020. From 2017 to 2018, Wish’s revenues rose from $1.10 billion to $1.73 billion, representing growth of 57%. However, from 2018 to 2019, revenue growth slowed to $1.90 billion, an increase of only 10%.

The situation has recently improved for the digital retailer, with Wish achieving faster growth during the first three months of 2020. In the first nine months of 2019, Wish generated revenues of $1.33 billion. During the same timeframe in 2020, the company’s revenue increased to $1.75 billion, a 32% rise compared to the previous year.

This is significantly better than the 10% growth rate Wish reported in 2019. Wish’s accelerating growth is a key reason for its current IPO, as it provides a compelling growth narrative for potential investors.

However, this accelerated growth has resulted in increased losses. During the first three quarters of 2019, Wish reported net losses of $5 million, which increased to a total deficit of $12 million when factoring in preferred stock costs. In the corresponding period of 2020, Wish experienced a considerably larger loss of $176 million.

Wish’s declining gross margins have also contributed to this trend. In 2018, Wish had gross margins of 84%. This figure decreased to 77% in 2019, and further to 65% in the first three quarters of 2020.

But the e-commerce company also presented some encouraging data, as detailed in the following table:

Has free cash flow improved in 2020 compared to 2019? Yes. Is monthly active user growth trending upward? Indeed. Are active buyers higher than the year-ago period? Affirmative. While the company’s adjusted profitability is not particularly strong, an adjusted EBITDA margin of 6% is unlikely to deter investors if they are receptive to Wish’s growth prospects.

The S-1 filing makes clear that COVID-19 was not solely a positive influence for Wish. The pandemic caused disruptions to some supply centers, slowed supply chains, and extended delivery times. However, the company also noted that it “benefited from increased mobile usage and reduced competition from brick-and-mortar retail due to shelter-in-place orders” and “benefited from greater user spending as a result of U.S. government stimulus programs.” Wish cautions investors in the document that it “cannot guarantee that increased levels of mobile commerce will persist after COVID-19 subsides or otherwise, or that the U.S. government will implement further stimulus programs,” given the phasing out of stimulus measures.

Wish possesses substantial financial resources, holding approximately $1.1 billion in cash, cash equivalents, and marketable securities. Furthermore, the company has no significant long-term debt obligations.

Finally, who stands to benefit most from this transaction? Notably, Peter Szulczewski, Wish’s founder and CEO. He controls 65.5% of the company’s Class B shares and approximately 58% of its total voting power prior to the IPO. Major investors include DST Global, Formation8, Founder Fund, GGV Capital, and Republic Technologies.

Therefore, a considerable amount of venture capital investment and potential returns are tied to this IPO. Further updates will follow.