Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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Another feature that helps make Karmaloop a go-to source on urban street culture and apparel is Karmaloop TV, a collection of original videos posted to the site. They range from the serious, such as an interview with Slumdog Millionaire film director Danny Boyle, to the steamy, including a behind-the-scenes peek at a product shoot with a Karmaloop model.
Producing original content seemed a natural extension for Karmaloop, Selkoe says. “What we sell is not just clothes, but a lifestyle. It’s clothing, technology, video games and all the things our audience is interested in. At Karmaloop we’d built a good name. We sell to a lot of celebrities. My thinking was, why don’t we leverage our position and create our own content,” he says.
All programming is created in a studio in Karmaloop’s Boston headquarters. With a full-time staff of three and other staffers pitching in as needed, Selkoe says Karmaloop TV runs on what’s so far been an investment of less than $1 million.
In the works for this year is yet another marketplace on the site, Karmaswap, where T-shirt collectors who follow brands like others follow rock stars will be able to put up for sale the limited-edition shirts they own. Later on, Karmaloop plans to enable site visitors to trade vintage T-shirts.
Last year, Karmaloop took its first-ever venture capital funding, selling 35% of the company to Insight Venture Partners for $30 million. Selkoe says his early investors got their money out, and more. It took nearly a decade of bootstrapping for Karmaloop to gain its market position and attract the kind of investment that established businesses can get. Most of its employees are now in their mid-twenties, but with the inevitable maturing of the business and its leadership, will “established” dilute its trademark edginess?
The way around that particular pitfall is to stay well-connected to its customers living the streetwear culture, Selkoe says. And with the street team, the Kazbah and staffers who live the life themselves, Karmaloop’s doing just that. “We have very good communication with our customers,” he says. “We hear about what they want to see and things we need to change. It’s a constant evolution, but I think we are in a very good position to spot trends early and evolve with them.”