October 21, 2009, 12:00 AM

Diapers.com raises $30 million in capital

Quidsi, the parent company of Diapers.com, closed on $30 million in new financing from New Enterprise Associates and three existing investor groups. The funding will be used to expand the e-retailer’s product offerings and enhance customer service.

Quidsi Inc., the privately held parent company of Diapers.com, closed on $30 million in new financing. New Enterprise Associates Inc. led the funding effort, which included existing investors Accel Partners, Bessemer Venture Partners and MentorTech Ventures. The capital will be used to expand product offerings and enhance customer service at the online retailer of diapers and other baby supplies.

Diapers.com, No. 140 in the Internet Retailer Top 500 Guide, was the fifth-fastest growing e-retailer in the 2009 edition with 2008 web sales of $89 million, a 147% increase from $36 million in 2007. The web-only retailer launched in 2005 and has steadily expanded its products from diapers and wipes to include formula, strollers and car seats. The company attributes its success to a loyal customer base-numbering “several hundred thousand”-cultivated through low prices and customer service that includes free overnight shipping to two-thirds of the U.S. and two-day delivery to the rest of the country.

“Diapers.com is building one of the best and most trusted retail brands in America, and NEA is excited to support the company’s continued growth,” says New Enterprise Associates partner Tony Florence, who is joining the Quidsi board in conjunction with the financing. “This is an exceptional management team that has built a category-leading e-commerce company, and we are excited about the opportunities we see in Quidsi for future growth initiatives.”

Of the new capital, Marc Lore, co-founder and CEO of Diapers.com, says “We plan on using these new funds to further our mission, which has always been simple. Make life a little easier for new parents. That means carrying everything they could possibly need or want, get it to them faster than anyone, charge low prices and most importantly, deliver the best customer service, bar none.”

In addition to broadening its product lines, Diapers.com says it soon will roll out a baby registry to help expectant parents prepare for their new arrival.

New Enterprise Associates, Bessemer Venture Partners, Accel Partners and MentorTech Ventures are venture capital firms. Dorsey, Whitney LLP represented Quidsi in connection with the Series E financing.

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