Fab was originally launched as a social network but later transformed itself as a luxury flash sales site with a focus on design. It now offers flash deals for all types of products made by budding designers. The site with five million members that sells 3.4 products a minute received a big boost when it successfully raised $105 million in its third round of funding taking the total funding to $157 million so far. More importantly the investors valued the business at a massive $US600 million. Some of Silicon Valley’s biggest investors led by Atomico provided the funding. Pinnacle Ventures, re-Net Technology Partners, Mayfield Fund, DoCoMo Capital, and existing investors Menlo Ventures, Andreessen-Horowitz, Baroda Ventures, and First Round Capital are all part of the substantial funding.
Luxury Flash Sales Site “Fab” Funding
Jason Goldberg, founder and CEO of the site confirmed the funding and said that the money will be used to expand the business internationally. He was thrilled about the development but said that big money brings big responsibility. He is focused on building a team and not specifically looking at acquiring an existing team or a company. He would rather spend the money on acquiring better technology to speed up delivery and expand the product base. Goldberg who is a serial entrepreneur by nature feels settled down with Fab and thinking about it all the time in the long term. The new funding has got him thinking and he is looking forward to making Fab a giant brand on par with the IKEAs of the world. His approach is not of building a company but a brand. He sees Fab as an opportunity that can be built up to be the next great brand on the scale of an IKEA, a Google, a Facebook, an eBay that is recognized and admired all over the world.
Fab is Focused on Specific Demography
He is working towards this goal and is concentrating on creating the right Fab culture that should be reflected in its team, the products, the look and feel, the operations and the customer service. It has to be real and authentic for it to become successful. He believes that if he gets the culture right he will get the brand right. The site has launched its 3.0 version that provides its users the experience of window shopping. It enables you to see what other people are buying on the site real time. Fab is operating in 20 countries with staff strength of 400. They are available in U.S., Germany, England, Belgium, and India among others. The deals market is in some kind of a flux. Even Groupon seems to have slipped as it has lost almost 70% of its value. It might even be difficult to take it forward without restructuring. But Fab has performed well because it is focused. 44% of its members are between 25 and 34 years old, and 50% of them come to the site through social networks. It has not adopted a general approach but has targeted specific demographics which has paid rich dividends for the site. At the same time Fab is focused more on products than on services. The margins on products are much better than services and it shows in its bottom line.