The Wall Street Journal reports that Fab.com closed their Series C, raising an additional $105Mil at a $600Mil valuation. This compares to the Series B of $40Mil they raised in December of 2011 at a reported $200Mil valuation…3x isn’t bad for seven months. Not to mention that it has barely been a year since the company pivoted from being a gay social network to a flash-sales site.
Writing on the companies blog, Jason Goldberg mentions that they intend to use the money to expand internationally, build more fulfillment centers, and most importantly continue to build their platform from the ground up. The last two are most important to me: building out their fulfillment centers and logistics are a clear sign that they have matured past flash-sales, and they must continue to innovate their platform, as it has served as a constant and evolving example of what e-commerce should be.
Fab’s recent round was led by Atomico (Skype founder, Niklas Zennström’s fund). Also participating in the round were Fab’s previous investors: Andreessen Horowitz, Menlo Ventures, First Round Capital, Baroda Ventures, ru-Net Technology Partners, Pinnacle Ventures, Docomo Capital, Mayfield Fund, and Troy Carter.
This latest round is clearly a bet on Fab becoming a multi-billion dollar business and much more than a flash-sales site. Honestly, I have a hard time disagreeing with this conclusion. Their platform includes numerous revolutionary social shopping features that are consistently ahead of their time. Most recently, Gilt copied Fab’s “recent purchases feed” (Internet Retailer Article: here).
Interestingly, Fab was one of the last companies to the flash-sales space, and they are on pace to be the first one to fully mature past flash-sales. While writing this article, I conducted a random survey of 20 items on Fab.com. I found that the average advertised markdown was 25%, which is clearly not flash sales territory. That said, there are still some items marked down > 70%, especially within the furniture category, but there are also items that are not marked down at all.
Congratulations to the Fab team, and here’s to Fab becoming a multi-billion dollar company. It’s a BIG market.
To give you an example of Fab’s innovation and customer focus: I recently received the below email encouraging me to manage my email subscriptions and to unsubscribe from those I didn’t want. Most e-commerce companies are constantly watching their opt-out rate to ensure they are maintaining their customer list. I was surprised when I saw this, and of course didn’t choose to opt-out.