They also are more likely to become repeat buyers, Forrester Research says.
Investors pour $170 million in new capital into three flash-sale e-commerce sites.
Need cash to expand your e-commerce business? More than $170 million in funding in December went to three e-retail enterprises that offer registered members deals for a limited time.
Zulily, a members-only flash-sale retailer of products for women and children, raised $85 million in a Series D funding round, bringing its funding total to date to $138.6 million. The e-retailer, which launched in 2009, has 10 million members. Venture capital firm Andreessen Horowitz, which has also invested in members-only sites Fab.com and ShoeDazzle.com, led the funding round. It says Zulily is one of the fastest-growing businesses it has ever encountered.
Zulily CEO Darrell Cavens says the funding will go toward site improvements and business expansion. "The vast majority of purchases come from repeat customers and we need to continue to surprise and delight them," he says. "Additional funding will allow us to expand more quickly and continue to enhance the experience for today's busy mom."
Furniture and decorative goods flash-sale e-retailer One Kings Lane netted $50 million in funding, bringing the e-retailer's funding total to $117 million. The e-retailer, which launched in 2009, claims more than 6 million members. While existing investors participated in the funding round, the e-retailer also picked up a new investor, Scripps Networks Interactive Inc., which runs television and Internet brands HGTV, Food Network, Travel Channel, DIY Network and others. The company will participate in One Kings Lane's board going forward, the retailer says.
One Kings Lane launched its first television commercial campaign with Scripps in October. While it currently invests less than 10% of its marketing spend on those ads, that percentage will increase going forward, CEO Doug Mack says. The merchant also will increase its Internet marketing spend, he says, including a boost in Facebook advertisements and retargeting efforts. Technology investments will also be a major focus in 2013. One Kings Lane plans to expand its mobile program and upgrade its back-end systems that facilitate uploading new content for limited-time sales each day.
Wayfair LLC's rapidly growing home furnishings flash-sale site, Joss & Main, garnered $36.3 million from investors last month. Wayfair says Joss & Main has nearly 3 million registered members. "We are impressed by the traction that Joss & Main has secured over the past year in a category that is poised for tremendous growth," says Michael Kumin, managing partner at Great Hill Partners, one of several investors. "The company has built a successful model and has demonstrated the ability to consistently innovate in a very traditional industry."
The $36.3 million in equity financing follows an initial financing round of $165 million from the same investors in June 2011, bringing the total so far to just over $200 million, a Wayfair spokeswoman says. Last year's funding was for all of Wayfair's operations.