JustFab Fitted With $1 Billion Valuation For Fashion E-CommerceAugust 28, 2014
Wall Street Journal
by Lizette Chapman
Investors are backing fashion e-commerce startup JustFab Inc. at a $1 billion valuation, marking the latest example of public investors eager to own a share of a private company they hope will be the next hot IPO. (See WSJ’s Billion-Dollar Startup Club interactive graphic.)
New investor Passport Special Opportunity Fund, an arm of hedge fund Passport Capital, led the $85 million round, with participation from existing investors Shining Capital, Matrix Partners and Technology Crossover Ventures, JustFab co-founder Adam Goldenberg confirmed to Venture Capital Dispatch.
“We don’t have any immediate plans to go public,” said Mr. Goldenberg, adding it was not on his “to-do” list for 2015 either. However, he said, the company’s view “has always been to think and act like a public company. It’s a logical outcome for us.”
Like eco-friendly products startup The Honest Co., which raised a round earlier this week led by Wellington Management Company valuing it at nearly $1 billion, and other startups that are attracting hedge funds, mutual funds and other public-markets investors, California-based JustFab is growing quickly.
The company is tracking to do $400 million in 2014 revenue and more than $500 million in 2015 revenue, Mr. Goldenberg said. Of that amount, roughly 90% comes from the site’s subscribers.
JustFab customers enroll as subscribers by taking a fashion quiz and agreeing to pay $39.95 a month in exchange for buying one of the suggested shoes, handbags, jewelry, denim, athletic gear or other items JustFab designs and manufactures.
Subscribers get discounts on the items and can skip a month, with no penalty and no charge, if they choose to, with the $39.95 then remitted to the customer’s account as a credit.
Mr. Goldenberg declined to share the dollar amount of unredeemed credits, but said it was not large.
The new financing round, which increases total outside funding to $250 million, will be used to invest in existing products and services rather than launching new ones, he added.
The company commanded a $500 million valuation at the time of its last funding round–a $55 million Series C round that closed in December, according to VentureWire records.