May 31, 2011, 4:50 PM

Investment darlings du jour: Money flows to daily-deal retailers Gilt Groupe and Ideeli

As they ride the wave of members-only, flash-sale e-commerce activity, Gilt Groupe and ideeli are attracting big bucks from investors.

Thad Rueter

Senior Editor

Gilt Groupe Inc. and ideeli Inc., two e-retailers riding the growth wave of members-only, flash-sale e-commerce sites, have attracted major capital infusions that they plan to use to accelerate growth.

Gilt Groupe, whose 2010 sales rose 150% to $425 million by Internet Retailer estimates, raised $138 million last month. Gilt, which has been expanding from women's designer apparel into new categories like menswear and travel, says it will spend the money on acquisitions, geographic expansion and product additions.

Softbank Group, a Japan-based telecommunications, Internet and media company, invested $62.5 million in Gilt and has made additional investments in Gilt Groupe Japan, in which Softbank now has a 50% stake. "With our Internet technology and Gilt's innovative service, we look forward to working together to bring the Japanese market to a new stage of online shopping," says Masayoshi Son, chairman and CEO of Softbank.

Funding also came from previous investors General Atlantic and Matrix Partners, along with Goldman Sachs, New Enterprise Associates, Draper Fisher Jurvetson Growth, Pinnacle Ventures, TriplePoint Capital and Eastward Capital.

Ideeli, which also operates a flash-sale fashion site and has been expanding into travel, last month raised $41 million its third round of funding. Ideeli, with $31.9 million in 2010 sales, up 60% from 2009 according to the Internet Retailer Top 500 Guide, says it will use the capital to expand its product categories, hire employees, enhance its technology and boost marketing. Next World Capital led the funding round, which also included Cue Ball Capital, StarVest Partners, Constellation Growth Capital and Kodiak Venture Partners.

Sebastian Lepinard, Next World's managing partner and founder, will join ideeli's board of directors. "Ideeli has built an organization with strong values and processes that satisfy brand partners while growing sales at a very impressive rate," he says.

thad@verticalwebmedia.com

Comments

Sign In to Make a Comment

Comments are moderated by Internet Retailer and can be removed.

Not a member? Signup for free today!

Advertisement

Advertisement

Advertisement

Relevant Commentary

FPO

Sergio Pereira / B2B E-Commerce

Quill turns to its B2B customers for new ideas

Coming in April is a new section of Quill.com that will let customers and Quill ...

FPO

Charles Nicholls / E-Commerce

E-mail remarketing: three best practices to maximize revenue

Consumers who make it to the shopping cart are interested in buying. The chief strategy ...

Advertisement