Vente-Privée and Gilt Groupe are the key players in the battle to be the world’s leading private sale shopping club. Gilt Groupe entered into the top 50 of US online businesses with their 2010 revenue of $425 million (+150%). Vente-Privée is betting on their jump across the Atlantic.
In a mega financing round, Gilt has raised another $138 million:
"Participants in the fifth round include the Japanese-based telecom conglomerate Softbank Group as well as Gilt’s previous investors, General Atlantic and Matrix Partners.
Other new investors include: Goldman Sachs, New Enterprise Associates, Draper Fisher Jurvetson Growth, Pinnacle Ventures, TriplePoint Capital and Eastward Capital."
The money will be used primarily for acquisitions and launching new verticals:
"In the next couple of months, Gilt has committed to launching a gourmet food site and a full-priced men’s online retail apparel site, but others are also on their way."
Gilt tests potential new markets by trying out specifically selected offers on the main site and monitoring the sales results. They discovered that pet supplies is not a good market:
"To find out what vertical we’ll do next, we generally do ten sales on the site and see how it works. We did a lot of men’s full-priced sales and they went very well.
We’ve had a lot of pet sales, and they haven’t done as well. We try lots of things…Any of these could be set up as a new category."
Coinciding with the financing round, the interview with Gilt CEO Kevin Ryan on AllThingsD is a worthwhile read. Kevin Ryan sees only one international competitor, Vente-Privée:
"There’s only one player in the world to watch. Reports say Vente Privée will enter the US in the next nine months. But if you weren’t covering this business, you would have asked “Who? I never even heard of them.” That’s the reality, and for them to enter, they’ll have to set up warehouses and sign up members. Basically, you are a start-up…I don’t worry about international players, even ones that are bigger than we are."
This of course also applies to Gilt Groupe when it comes to other countries. Gilt is therefore starting a Japanese subsidiary next, since they won’t be the fourth private sales club there, but rather the first.
Also noteworthy is the statement about the geographic distribution of Gilt’s customer base:
"I thought the majority of our sales would come from outside New York, where people have access to sample sales all the time. But I was really wrong. It turns out that New York is by far our biggest market. People may be working only two blocks away, but they are busy. They are partners at Goldman Sachs. They don’t have time to go stand in line, but they can sneak online for five minutes."
This is supposed to be the last private financing round before Gilt goes public. A date for that is not yet known.
The European entry for Gilt is reported to be Ireland in September, where 200 employees are planned.
Related posts:
- Vente-Privée Targeting the USA
- Gilt Groupe Exchanges CEO, Kevin Ryan Takes Over
- How the Gilt Groupe Wants to De-Throne Vente-Privée
Originally posted in German by Marcel Weiss and Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.
Comments