Re/code is reporting that One Kings Lane, a leading flash sales site for the home market, announced today they have raised $112MM in new funding at a post-money valuation of $912MM, making it the latest Company to (almost) reach the $1Bn mark. This brings the total funding to $225MM. The lead new investor is Mousse Partners, who has also invested in other online e-commerce companies including Bonobos and Red Envelope. Mousse chairman Charles Heilbronn will join the Board of Directors. Existing investors Scripps Networks Interactive, KPCB, Greylock, IVP and Tiger Global Management also participated. Goldman Sachs advised One Kings Lane on the transaction.
The funds will be used to make key hires, expand its data/technology, and build its inventory. It will continue to focus on North America and its Hunter’s Alley brand, which lets users sell old home goods to each other. But you’ll notice there is no mention about getting to profitability. In fact, OKL’s philosophy is to invest aggressively to grow the business without a real focus on profitability, a strategy that has worked for others in the past,
“There have been a handful of meaningful e-commerce businesses built so far: Amazon, Zappos, Netflix. What you see is these companies invest really aggressively to grow the business for the first five years, and then they flip and begin to focus on profitability. When I started I set that as a mental milestone, and we’re about three years into that.”
That quote was from an interview with Inc. in February 2013. CEO Doug Mack goes on to say how the Company doubled revenue in 2012 to $200MM and was expecting to surpass $300MM in 2013, after raising a $50MM Series D, with a least 25% from mobile phones. We’d be curious to see if they hit those numbers and what their projections are for 2014. According to Forbes, the company was founded in 2009 and has ten million members. That’s up from six million in 2012.
I hope the aggressive expansion strategy is as successful as it was for the other e-commerce businesses. Good luck to Mack and the team at One Kings Lane.