There are a million daily deal and flash sales sites in the market today. I know because I spent most of New Year's Day unsubscribing from all of them (it took a while.) But some groups have been rising above the rest as valuable niche sites with a true focus on curation and customer service -- Fab.com has quickly become one of the few.
The high-design focused daily-deal site announced Friday that it acquired the community-selected marketplace of designers: FashionStake. Details of the deal were not disclosed.
Both companies are based in NYC.
In the past two years, Fab.com has done a lot of innovating and pivoting to find its niche and was handsomely rewarded with more than $50 million of funding from venture big boys such as Andreessen Horowitz, Menlo Ventures and First Round Capital.
Fab.com originally started its company as "Yelp for Gays" but that was not taking off as fast as they were hoping. Then they quickly adjusted to become "Groupon for Gays." But that also didn't get the desired traction. So the founder and CEO Jason Goldberg had to do some soul-searching and stop being the 'blank for gays' and start looking for something they could stand apart as -- that was finding unique design-centric items for those that love quirky and well-designed items.
The Fab.com that currently exists, didn't come to be until June 2011. Within seven months, the company accumulated more than 1.6 million members for the daily email and they had sold 750,000 products.
The biggest round of funding for the company came in December -- a $40 million round led by Andreessen Horowitz.
Now that the company has the capital to start acquiring other design and daily deal sites, we could see Fab.com close in on one of the biggest names in daily and flash sale companies -- One Kings Lane.
One Kings Lane has seen tremendous growth and has collected more than $63 million in funding over the last year. The company is now exceeding $100 million in yearly revenues after experiencing an “explosive 2010” in which annual sales jumped more than 500%, with 75% of those sales coming from repeat customers.
FashionStake's co-founders Vivian Weng and Daniel Gulati will be joining the Fab team and the company's website already redirects to Fab.com.
This acquisition is a clear push to expand the design focus to those that are passionate about fashion. The Fab.com blog explained that this will not be an easy market to expand into, but they are confident that the love of design compliments the love of fashion.
"Make no mistake, we’re keenly aware that there are plenty of sites that sell high-end fashion for a discount," said the Fab blog. "That’s not Fab. We’re doing fashion the Fab way; designed to make you smile."
Hundreds of independent designers have sold their creations on FashionStake and soon will be folded into the deals offered on Fab.
Other companies specializing in deals on unique fashion have pocketed funds in the last year including Trunk Club—a personalized shopping service for men— which raised $11 million in a round led by US Venture Partners in September. And Snapette, a mobile fashion app that lets users scan the latest styles and see which items are available nearby, raised $1.3 million in seed funding in October.
Fab.com has a great chance of making the expansion to fashion deals from design deals but it will have to show that it still has its own perspective and personality in order to not get lumped in with the masses.