JustFab, a subscription-based Internet retailer, raised $76 million in new financing, joining the top ranks of retailing venture-capital fundraisers this year behind Pinterest Inc. and Fab.com Inc.
Rho Ventures LLC led the funding and Mark Leschly, a partner at the New York-based firm, will join the board, JustFab said today in a statement. Matrix Partners, Technology Crossover Ventures and Intelligent Beauty Inc., JustFab’s parent company, also joined the round, bringing the total amount raised to date to $139 million.
JustFab’s funding puts it in sixth place among retail and e-commerce venture-capital deals this year, data compiled by Bloomberg show. The company said it will use the funds to broaden overseas business, including through acquisitions.
“The main purpose of this round of financing is to continue our international expansion,” Adam Goldenberg, co-chief executive officer of JustFab, said in an interview. “On the acquisition front, this round is bigger than what we need, so we’re going to have excess cash on the balance sheet. Companies that could help us with that expansion are intriguing targets.”
JustFab, which has Kimora Lee Simmons as its president and creative director, designs and sells its own brand of shoes, jewelry and handbags, and charges subscribers a flat $39.95 for each item. The company, which already has an online store in Germany, plans to open in the U.K. in September and “aggressively” invest in building a user base in the rest of Western Europe, Goldenberg said.
The financing comes on the heels of a $105 million round raised earlier this month by Fab.com, an online marketplace for well-designed products, such as tableware and jewelry made from skateboards.
JustFab’s $76 million in funding ranks it among the biggest fundraisers this year, data compiled by Bloomberg show. The list includes Fab.com, which raised $105 million, and Pinterest, which raised $100 million.
JustFab’s customers take a style quiz and receive personalized product recommendations tailored to their tastes. The company’s 6 million subscribers have to visit the site at least once a month to maintain membership and don’t have to commit to making a purchase, Goldenberg said.
“It’s all about engagement,” he said. “We want to train the customer to come back and shop with us every month. We believe that ultimately, we’re going to show them what they want, and that they’re going to spend a significant amount of their wallet share for fashion with us.”
JustFab and Fab.com each plan to reach $100 million in revenue this year, their respective CEOs have said.
JustFab is adding about 500,000 subscribers a month and expects to be profitable in the U.S. by 2013. Goldenberg said he’s able to sell merchandise at a higher margin than stores such as Forever 21 Inc. and Hennes & Mauritz AB -- or H&M -- whose styles JustFab seeks to emulate.
The company saves money by taking greater control of the supply chain by hiring staff to design products made by Asian manufacturing partners and shipping directly to consumers from the company’s warehouse in Louisville, Kentucky.
Intelligent Beauty Inc., JustFab’s parent, logged $400 million in revenue last year from its three properties -- JustFab, DermStore.com LLC, which sells beauty products, and Sensa Products LLC, a weight-loss company. Goldenberg and Don Ressler are co-chief executive officers of both JustFab and Intelligent Beauty.