The big (e-commerce) investor of the hour is currently Kennet Partners. The growth stage financiers seem dead set on quickly dispensing up to $300 million.
As such, Spreadshirt (10 million Euro round in February), plus a string of other startups, and now BuyVIP (14.9 million Euros) are profiting from the Briton’s generous mood.
Kennet investment manager Maximillian Bleyleben has analysed the growing market for shopping clubs in his blog:
At €1bn+ in 2008 and growing, it's a channel that the fashion industry is starting to build into regular supply chain plans. We're already seeing this concept evolve from a way to dispose of excess inventory into an incremental outlet for current-season goods.
Picking the best business to back in this market seems difficult on the surface. There are 3 or 4 European players that have shown great traction in their home territory, including Brand Alley (GB), Brands4Friends (DE), Privalia (ES), Private Outlet/Andrino Group (FR).
Most have received hefty doses of growth financing from angels and VCs. But we had to choose, and we're excited to back BuyVIP for several reasons."
With strong pressure coming from Vente-Privée, BuyVIP must - as does Brands4Friends - fuel their expansion at any price. Accordingly thin is this ice on which they are dancing. In other words they are both high risk investments that can only go well with some luck to back them up. In contrast to Vente-Privée, both competitors haven’t seen much enthusiasm from the members they’ve collected with their million Euro marketing budgets.
The current daily traffic numbers turn out to be pretty meagre in relation to the membership numbers (the specific numbers for Germany here). An improvement could be expected once the relationships with the designers and manufacturers solidify and if we see consistently attractive sales campaigns. The big question is only if Vente-Privée gives them the chance.
According to BuyVIP, they are profitable and have now raised over 25 million Euros of capital. At that level they would be clearly ahead of Brands4Friends, who are up to 16 million Euros now after their latest round of 10 million. BuyVIP are thus showing increasing confidence in interviews.
At the Live Shopping Days conference in Berlin, BuyVIP founder Gerald Heydenreich made remarks on the success factors of shopping clubs in a video interview (German language).
Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.
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