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Fab nabs $150 million in funding
New investors include Tencent, a major Chinese web company.
Fab.com, a fast-growing specialty e-retailer, has raised $150 million in its fifth funding round in a little more than two years. The round has not yet closed, but Fab.com announced some participating investors yesterday. They include two new investors from Asia: Tencent Holdings Ltd. and Itochu Technology Ventures.
Tencent is a major Internet service provider in China and operates QQ, an instant messaging service that claims 825 million users; PaiPai.com, an e-commerce site; and Tenpay, an online payment platform, among other services. Tencent last year announced plans to invest more than $1 billion in e-commerce. Itochu Technology Ventures is the venture capital division of Tokyo-based Itochu Corp., a domestic trading and import/export company with operations globally. Fab did not say how much either new investor contributed to the funding round, or the amount contributed by seven existing investors, but Tencent will have a seat on Fab’s board of directors, writes CEO Jason Goldberg in a blog post.
The latest investment round brings Fab’s funding total to date to more than $310 million. Goldberg says Fab.com will use the money to expand globally, following a stated plan to make Fab.com an e-commerce company worth more than $10 billion. That’s a club with few members today, notably Amazon.com Inc., Alibaba Group, eBay Inc. and Rakuten Inc.
Fab.com is No. 150 in the Top 500 Guide.
“We want Fab to truly be a global brand,” Goldberg writes in the blog. “In the coming months we’ll be working on rolling out Fab to even more countries.” He does not say which ones. Fab.com now sells to consumers in 28 countries and says 40% of sales in April came from outside the United States.
In the near term, spending will include investments in technology, supply chain and logistics, Goldberg says. He says improvements Fab has made in these areas recently have helped increase its margins. He says Fab.com now generates 43% gross margin on sales versus 29% in 2011. It will open a warehouse in the Netherlands to serve customers in Europe later this year and plans to open a second U.S. warehouse next year, near Las Vegas. It’ll also apply funds toward product development and manufacturing with designers that create products exclusively for Fab.com.