(Updated with confirmation and comment from JustFab)
Though it is beginning to branch out, the tech scene in Los Angeles is known for just a few things right now: gaming and other forms of entertainment, and subscription commerce. Now one of the companies in the latter category is about too break out in a big way, possibly with an IPO in its future.
Subscription E-commerce company JustFab has just raised a new round of funding, totaling $85 million, it has been confirmed to VatorNews. The round was led by Passport Special Opportunity Fund, with participation from existing investors such as Matrix Partners and Shining Capital.
The company had previously raised $164 million altogether, including a $40 million Series C round in September 2013, as well as a $15 million follow-on in December. Other previous investors in the company include Rho Ventures and Intelligent Beauty.
This latest round brings JustFab's total funding to just under $250 million, and values the company at $1 billion, according to PandoDaily who first reported the funding on Thursday, making it just the latest company to enter that club.
There are 26 other companies that have a valuation of at least $1 billion, according to CB Insights, including Snapchat, Airbnb, Uber, Square, Dropbox, LendingClub, JawBone and Pinterest. The number of companies to reach that milestone is increasing, as bigger financing and secondary market rounds have become more common. At least 15 companies have earned valuations of a minimum of $1 billion so far this year, compared to just nine in all of 2013.
Founded in 2010, the El Segundo-based company is an online fashion retailer. The site offers its members a personalized shopping experience based on their fashion preferences.
Here's how it works: JustFab members subscribe, take a style quiz, and then pay $39.95 a month for any item selected from a specially curated collection assembled just for them. Members can skip the month and avoid charges if they do so between the first and fifth of each month, otherwise a credit will be applied to their account.
The company, which started out offering women's clothing, has since introduced lines of children’s clothing as well, called Fab Kids, and an active wear line called Fabletics, which generated $1 million in sales on its own in December 2013.
The new funding will go toward category expansion and international expansion, a JustFab spokesperson told me.
JustFab will be moving more heavily into apparel next year focusing on growing as a complete fashion brand. As for international expansion, the company is looking at expanding Fabletics into more countries in western Europe, as well other markets outside of Europe.
"We had the opportunity to strengthen our balance sheet and raise money at a very attractive valuation," the spokesperson said. "While we didn’t need to raise money, as a capital intensive business, this round allows us to continue to scale each of our business units (JustFab, ShoeDazzle, Fabletics, FabKids) quickly and comfortably."
JustFab co-CEO Adam Goldenberg has previously predicted that the company will generate $400 million this year, and he reiterated that figure to PandoDaily. He is also now predicting that the company will increase revenue to $500 million next year, fromJustFab, Fabletics, FabKids and ShoeDazzle, the e-commerce website offering personalized shoes for women that JustFab acquired in August of last year.
VatorNews has reached out to JustFab for confirmation of this new funding. We will update this story if we learn more.
(Image source: justfab.com)