Life is looking pretty fab for flash sales site Fab.com. The New York City startup has closed a $40 million round of funding.
The round was led by Andreessen Horowitz, and included existing investors Menlo Ventures, First Round Capital, Baroda Ventures, SoftTech VC and Ashton Kutcher's A-Grade Investments.
According to The Wall Street Journal, the company is now valued at $200 million.
Not bad for a company that scrapped its old business plan and started from scratch just six months ago.
Fab originally launched in June 2010 as Fabulis, a social network for gay men. But cultural acceptance of LGBT people was leading to "a negative impact on the demand for our services," founder Jason Goldberg said at the time.
So he did what he told Social Beat was "the mother of all pivots; we restarted the company with a million in the bank. We just had to ask our investors to trust us."
“[Chief creative officer] Bradford [Shellhammer] and I spent about a month deciding whether we wanted to go in a different direction [from Fabulis]. His background is in design, and mine is in building websites. I said, ‘Let’s just take the two things we’re really good at and put ‘em together.’ It was just nervous excitement; we’ve never looked back once we decided,” he said.
It relaunched June 9 as a design-focused flash sale site, and within six weeks announced it had closed an $8 million Series A round of funding.
Fab was also already profitable at the six-week mark, and had hit the 400,000 user mark.
“We’ve been doing a lot of experimentation. We just picked out stuff that we liked and put it on the site; there was no category. Kites, bikes, speakers, gadgets—we’ve been learning what sells, and we’ve been surprised. Our number-one selling products were outdoor planters. And we sold tons of maps—what a shocker," Goldberg said in July. (He said the company had no ambitions to be a fashion company. "That’s more about liquidation; our model is more about opening a new channel for suppliers.”)
In November, Fab.com processed 100,000 orders—double that in October. It's currently averaging $1.4 million in sales a week. The site has 1.2 million registered users, and hopes to hit the 4 million mark in 2012. It's also profitable, and expects to bring in $20 million in revenue this year.
The site faces competition from One Kings Lane, which in September announced it had raised $40 million—a round that valued the two-year-old company at $440 million. CEO Doug Mack told The Wall Street Journal the company was on track to bring in more than $100 million in revenue in 2011, but was not profitable.
Fashion flash sale heavyweight Gilt Groupe also relaunched its home goods offerings in October, after raising $138 million in May from investors.
Image credit: etechmag.com