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Main article: Farfetch

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Topics from 1 to 10 | in all: 12

A conversation with ‘the most ambitious female VC in Europe’

15:34 | 29 January

Blossom Capital, the venture capital firm co-founded by ex-Index Ventures and LocalGlobe VC Ophelia Brown, just raised a new $185 million fund.

The firm’s remit remains broadly the same: to be the lead investor in European tech startups at Series A, along with doing some seed deals, too. In particular, the firm says it will continue to focus on finance, design, marketplaces, travel, developer-focused tools, infrastructure and “API-first” companies.

Pitched as a so-called “high conviction” investor, Blossom backs fewer companies by writing larger cheques and claims to have close ties to U.S. top-tier investors ready to back portfolio companies at the next stage.

Just two years old, its portfolio companies include travel booking platform Duffel, which received two follow-on investment rounds led by Benchmark and Index Ventures; cybersecurity automation platform Tines, which received follow-on investment led by Accel Partners; and payments unicorn Checkout.com, which is also backed by Insight Partners.

Good timing, therefore, to have a catch-up call with Brown, where we talked investment thesis, why Europe is at an “inflection point,” diversity in the investor community and the increasing money coming into Europe from American VCs.

This interview has been edited for length and clarity.

 


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Felix Capital closes $300M fund to double down on DTC, break into fintech and make late-stage deals

12:49 | 15 January

To kick off 2020, one of Europe’s newer — and more successful — investment firms has closed a fresh, oversubscribed fund, one sign that VC in the region will continue to run strong in the year ahead after startups across Europe raised some $35 billion in 2019. Felix Capital, the London firm founded by Frederic Court that was one of the earlier firms to identify and invest in the trend of direct-to-consumer businesses, has raised $300 million, money that it plans to use to continue investing in creative and consumer startups and platform plays as well as begin to tap into a newer area, fintech — specifically startups that are focused on consumer finance. 

Felix up to now has focused mostly on earlier-stage investments — it now has $600 million under management and 32 companies in its portfolio in eight countries — based across both Europe and the US. Court said in an interview that a portion of this fund will now also go into later, growth rounds, both for companies that Felix has been backing for some time as well as newer faces.

As with the focus of the investments, the make-up of the fund itself has a strong European current: the majority of the LPs are European, Court noted. Although Asia is something it would like to tackle more in the future both as a market for its current portfolio and as an investment opportunity, he added, the firm has yet to invest into the region or substantially raise money from it.

Felix made its debut in 2015, founded by Court after a strong run at Advent Capital where he was involved in a number of big exits. While Court had been a strong player in enterprise software, Felix was a step-change for him into more of a primary focus on consumer startups focused on fashion, lifestyle and creative pursuits.

That has over the years included investing in companies like the breakout high-fashion marketplace Farfetch (which he started to back when still at Advent and is now public), Gwyneth Paltrow’s GOOP, the jewellery startup Mejuri, trend-watching HighSnobiety, and fitness startup Peloton (which has also IPO’d).

It’s not an altogether easygoing, vanilla list of cool stuff. Peloton and GOOP have had been mightily doused in

and sharky sentiments; and sometimes it even seems as if the brands themselves own and cultivate that image. As the saying goes, there’s no such thing as bad press, I guess.

Although it wasn’t something especially articulated in startup land at the time of Felix’s launch, what the firm was honing in on was a rising category of direct-to-consumer startups, essentially all in the area of e-commerce and building brands and businesses that were bypassing traditional retailers and retail channels to develop primary relationships with consumers through newer digital channels such as social media, messaging and email (alongside their own DTC websites). 

This is not all that the company has focused on, with investments into a range of platform businesses like corporate travel site TravelPerk, Amazon -backed food delivery juggernaut Deliveroo and Moonbug (a platform for children’s entertainment content), as well as increasingly later stage rounds (for example it was part of a $104 million round at TravelPerk; a $70 million round for marketplace-building service Mirakl; and $23 million for Mejuri.

Court’s track record prior to Felix, and the success of the current firm to date, are two likely reasons why this latest fund was oversubscribed, and why Court says it wants to further spread its wings into a wider range of areas and investment stages.

The interest in consumer finance is not such a large step away from these areas, when you consider that they are just the other side of the coin from e-commerce: saving money versus spending money.

“We see this as our prism of opportunity,” said Court. “Just as we had the intuition that there was a space for investors looking at [DTC]… we now think there is enough evidence that there is demand from consumers for new ways of dealing with money and personal finance.”

The firm has from the start operated with a board of advisors who also invest money through Felix while also holding down day jobs. They include the likes of executives from eBay, Facebook, and more. David Marcus –who Court backed when he built payments company Zong and eventually sold it to eBay before he went on to become a major mover and shaker at Facebook and is now has the possibly Sisyphean task of building Calibra — is on the list, but that has not translated into Felix dabbling in cryptocurrency.

“We are watching cryptocurrency, but if you take a Felix stance on the area, it’s only had one amazing brand so far, bitcoin,” said Court. “The rest, for a consumer, is very difficult to understand and access. It’s still really early, but I’ve got no doubt that there will be some things emerging, particularly around the idea of ‘invisible money.'”

 


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Atomico Partner Tom Wehmeier reviews ‘The State of European Tech’ 2019 report

01:33 | 3 December

Atomico, the European venture capital firm founded by Skype’s Niklas Zennström, has released its latest annual The State of European Tech report, published in partnership with Slush and Orrick.

As part of the report, the authors surveyed 5,000 members of the ecosystem — including 1,000 founders — as well as pulling in robust data from other sources, such as Dealroom and the London Stock Exchange .

This year, the report reveals that the European tech ecosystem continues to mature and shows no sign of slowing — particularly highlighting the contrast from five years ago when the The State of European Tech report made its debut. Almost every key indicator is up and to the right, except, rather depressingly, diversity.

The data shows, for example, that competition for talent and access to the best founders has increased ferociously. And from a funding perspective, European founders have more choice than ever, especially with U.S. and Asian VC firms investing more and more in the region. Progress with gender diversity stalled, however, such as 92% of funding going to all-male teams.

I caught up with the report’s author Tom Wehmeier, Partner and Head of Insights at Atomico (also sometimes jokingly referred to as the “Mary Meeker of Europe”), where we discuss in more detail some of the key findings and why, it seems, that the rest of the world has finally woken up to Europe’s tech potential.

But first, a few headlines from the report:

  • European technology companies are on track to raise a record 30$B+ in funding in 2019, up from $25B the year before. (Source: Dealroom)
  • Despite failing to match the level of venture-backed exits of 2018, there was a record number of 40 $100M-plus deals as of September 2019, a size that many European tech sceptics did not believe was possible. (Source: Dealroom)
  • A number of multi-billion-dollar non-venture backed companies like Nexi and Trainline made their debut on the public markets.
  • European tech policymaking remains a mystery to many European founders.
  • When asked to describe the top priority of the European Commission in terms of tech policy, 40% of founders and startup employees say they don’t feel informed enough to comment. (Source: survey)
  • Despite this reported lack of awareness on policy issues, all respondents voted EU competition commissioner Margrethe Vestager as the person who had the most influence on European tech in 2019, good or bad. (Source: survey)
  • European parliamentarians aren’t talking about fintech and digital health, two sectors which investors poured a combined $12.7bn into last year (Source: Politico and Dealroom)
  • Europe’s diversity figures are still grim reading.
  • In 2019, 92% of funding went to all-male teams, a similar level to 2018. (Source: Dealroom)
  • There is still only one woman CTO in the 119 companies (<1%) based on a sample of executives in CxO positions at 251 European VC-backed tech companies that raised a Series A or B round between 1 October 2018 and 30 September 2019 with more than $10M funding, even though 7.5% of software engineers are women. (Source: Stack Overflow, Craft, Dealroom)
  • Looking beyond gender diversity, ethnic minorities in tech experienced discrimination at a much high rate than white peers. (Source: survey)
  • At least 80% of Black/African/Caribbean respondents who reported experiencing discrimination linked it to their ethnicity. (Source: survey)
  • 63% of women VCs reported increased focus on attending events with stronger participation from diverse founders. The corresponding number for men VCs was only 33% of female respondents suggested that their male counterparts are leaving female VCs to fix Europe’s diversity problem. (Source: survey)
  • European founders aren’t just aiming for commercial success — they are trying to solve some of the world’s largest problems.
  • One in five European founders states that their company is already measuring its societal and/or environmental impact. (Source: survey)
  • Only 14% of founders don’t believe it’s relevant for their company. Founders that are women are much more likely to be advanced in their approach to measuring impact. (Source: survey)
  • Employees are placing a greater emphasis on corporate social responsibility, with 57% citing its importance in the State of European Tech survey. (Source: survey)

Extra Crunch: It is 5 years since Atomico published the first The State of European Tech report, which really attempted to capture a data-driven snapshot of the entire ecosystem. What are some of the biggest changes you’ve seen within European tech in the intertwining years or in this year in particular?

Tom Wehmeier: If I think back to when we did the first report, people who believe that Europe could actually be an interesting player in global technology, were largely limited to people who were in the tech industry in Europe itself. If you then fast forward to today, what has clearly happened — and I think 2019 was the year where this really materialized and became part of the narrative — was that belief translating from people on the inside to a bunch of people that were on the outside.

Most obviously has been the strength of interest from from the U.S. and the number of top-tier U.S. funds that are not just increasing their level of investment activity but committing to spending more and more time here on the ground, hiring people, building teams, building a network, and getting to know companies. I think it probably surprises people to know that 19% of all rounds this year will involve at least one U.S. investor in Europe, which is more than double since since the first year we did the report.

I think the other thing, where I come back to this idea that now we have finally convinced a certain group of people about the role that Europe can play, is mainstream institutional investors. I know it is not going to be lost on you, [but] this is going to be another record year for VC fund raising from Europe. And whilst the headline numbers might not be a surprise, I think what should catch people’s attention is that the composition of the LP base here in Europe is now shifting. And finally, there’s an unlocking of institutional investors, [by which] I mean pension funds, funds of funds, insurance companies, sovereign wealth funds, who are committing to European VC at levels that are significantly increased and elevated from where they had been in the past. So, if you just take pension funds, we’re going to see close to a billion dollars invested which is up nearly three fold.

It’s a validation of what’s happening around European tech to see that now coming through and I think is ultimately something that helps to build a foundation for the next five years of success. As much as this is a report that’s looking back, it’s also about trying to understand where things go from here.

With regards to the pension funds, do you think that is driven by the general bullishness towards European tech, or do you think it’s more the macro economic reality that maybe other places where they could put their money aren’t very attractive at the moment?

I think it’s really a reflection that there’s a strong level of belief that European venture as an asset class is an attractive investment opportunity. And that is reflected by the numbers. One of the charts that we’ve got in the report is from Cambridge Associates who do the benchmarking for the VC indices… And when you look back over a 1, 3, 5, or even a 10 year horizon, the performance from European VC is demonstrating that this is a place where for anyone building a diversified portfolio, they should have some allocation. I think it’s fundamentally the strength of the investment opportunity. That is the single biggest driver for why you’re seeing this happen.

I think the biggest thing that Europe has been able to prove is that it can take a great idea and turn it into a great company and that company can scale to not just a billion dollar outcome but to a multi-billion dollar outcome and go all the way through into an IPO or into a large scale acquisition. What you’ve seen happen in 2019 is in part A reflection of what happened last year where it was obviously this record year with Spotify, Adyen, Farfetch, Elastic and others that really showed you can go full cycle from start all the way to finish. And that the magnitude of those outcomes can be at a scale that makes them globally relevant.

Are the pension funds shifting their allocation of VC away from other geographies or are they just doing more VC as a whole?

 


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Trouva, an online marketplace for independent boutiques, raises $22M

14:27 | 27 November

Amazon helped pioneer and now dominates the online marketplace business model, where a variety of merchants post items for sale on its platform for billions of consumers to discover and buy them. Today, a London startup that’s taken that idea but is applying it to a far more curated set of retailers and goods has raised some money to fuel its international growth.

Trouva, which provides an online marketplace for brick-and-mortar independent boutiques selling “beautiful” and hard-to-find pieces — think Farfetch but less fancy and less high-end design — has raised £17 million ($21.8 million) in funding, money that it will be using to expand outside of the UK on the back of a strong launch in its Berlin last year, as well as to continue building out more technology on its platform, specifically around inventory and logistics management.

The funding is being led by Octopus Ventures, C4 Ventures (the venture firm launched by Apple vet Pascal Cagni) and Downing Ventures. BGF and LocalGlobe were also in the round, which brings the total raised to about $36 million. Mandeep Singh, who co-founded the company with Alex Loizou and Glen Walker, said in an interview that the startup is not disclosing valuation. 

Amazon may dominate our consciousness (and for some of us, our wallets, with its sticky Prime perks) when it comes to browsing for a variety of goods online, buying them, and getting them delivered to us in an efficient way.

But the Amazon way leaves a lot out of the proposition: for retailers it doesn’t give them a lot of leeway in how they present items, and they have to compete with many thousands of other offers (including Amazon itself) to get their products seen.

More generally for both sellers and buyers, the ethos of the platform is that of an “everything” store with little in the way of focus or curation: you can watch movies or listen to music, or you can buy an HDMI cable, or you can buy food, or you can buy a book, or you can buy a vase… and so on. That in a way makes it more of a functional rather than pleasurable experience.

This opens the door to a multitude of different competitors, and there is where Trouva has stepped in. Where Amazon gives us the promise of everything, the smaller startup has effectively incorporated scarcity into its DNA.

“We are very picky,” Singh said. “We have to turn down the majority of applications from stores that want to sell on our site. We are looking for the very best curators. Having every single vase in the world is less important than having the best one, curated by an expert.”

While we are continuing to see a surge of purchasing via the web and apps — a trend that will get played out during holiday shopping in the weeks ahead — analysts estimate that some 85% of retail is still happening offline.

Within that group there is an interesting core of brick-and-mortar independent shops: At a time when large chains and the likes of Amazon are shifting the sands for how people sell things — and certainly how people shop — there remains a large group of independent retailers — “curators,” as Singh describes them. These shops target consumers with disposable income, people who are looking for more unique things to buy with their money.

The challenge of the ‘High Street’

Independent stores are often under threat in cities like London. First, they pop up in areas where rents are not as high, with like-minded people congregating to live in the same neighborhoods for the same reason. There, they sell a small selection of not-cheap clothes, interesting home goods, a variety of tchotchkes, or quirky gifts and develop a local following.

But their emergence can also often signal wider tides of gentrification. Ultimately, that shift is what moves those stores out as the rents subsequently go up, and bigger chains and fancy boutiques move in. (SoHo in NYC is another classic victim of this trend.)

Be that as it may, Singh notes that there are still more than 20,000 independent shops in the UK. “And we are working with 500 of the very best,” he added.

The company’s biggest competition, to my mind, are other players that are also looking to target the same kinds of shoppers online, for example, another UK site, Not On The High Street, or Etsy, which focuses less on retailers and more on makers. Similarly, there is the prospect of stores building their own sites, although that comes with its own set of headaches that independent shopkeepers may be less inclined to deal with.

“Yes, it’s very easy for an independent brick-and-mortar boutique to set up an online shop. That’s the easy part,” Singh said. “But what you find with independents is that building a website doesn’t help drive customers. There is a range of backend technology that we take care of, including inventory management software and handling the logistics of shipping. All of those can be difficult for a [physical] boutique to do on its own. It’s easy to sell online but you still need someone who has the economies of scales to pick up and deliver.”

On the other hand, he notes that “Amazon definitely doesn’t worry us.”

“We position ourselves as the complete opposite. Giants like that are too focused on categories that work well,” he added. Notably, he believes that the biggest threats are the same ones that threaten the independent stores that use Trouva to sell online: “Offline chains, those who sell homewares and clothes. The big guys.”

Trouva has no plans to move into selling its own goods, or to work with other online retailers, although it might consider down the line how it could leverage warehouse space to help its retailers with their inventory management (since many of these shops are very small indeed). “One hundred percent of our supply comes from our brick and mortar store partners,” he said.

Nor does it currently have anything like a Prime-style loyalty program. It does work with retailers and shipping partners to provide an end-to-end shipping service from store to buyer, with options for next-day delivery if it’s necessary.

“The relationship is mutually symbiotic with the boutiques, who benefit from a broader customer base, better priced and efficient delivery and stock tracking and management software from Trouva, and in turn higher revenues and improved profitability,” said Jo Oliver, a venture partner at investor Octopus. “As more boutiques are added the customer proposition becomes more and more attractive, particularly as Trouva’s footprint expands internationally.”

Singh notes that there is “exclusivity” for the shops that eventually come on to Trouva, although that’s almost by default since they are the kinds of small operations that are unlikely to be in the business of trying to expand their online presence.

Amazon has been working hard to improve how it interfaces with and curates items on its site to provide products, and a marketplace selling service, to the same consumer and retailer demographics that Trouva (and others) target. That’s unlikely to disappear over time, especially since Amazon plays the long game, where it will gradually tinker with an idea while at the same time quietly shift our shopping habits to match what it is producing.

“Online sellers like Amazon and eBay have tried to make a better experience, but it’s very hard for a business to change its DNA,” Singh said.

Updated with investor comment.

 


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Farfetch bets on sneakers with $250M Stadium Goods acquisition

23:19 | 12 December

The lines between streetwear and luxury fashion have blurred in recent years, especially as excitement around sneaker brands like Yeezy and Off-White has soared.

A marriage between a luxury fashion marketplace and a sneaker and streetwear reseller seems like a natural way to wrap up M&A in 2018. With that said, Farfetch has acquired New York-based Stadium Goods, opting to pay $250 million for the sneaker startup in a combination of cash and Farfetch stock. Headquartered in London, Farfetch went public on the New York Stock Exchange in September, pricing its shares at $20 apiece and raising $885 million in the process.

What’s more impressive is Stadium Goods’ journey to exit. The company, which sells new and deadstock products online and in a brick-and-mortar store in New York’s Soho neighborhood, was founded in 2015 by John McPheters and Jed Stiller and had only raised $4.6 million in venture capital funding from Forerunner Ventures, The Chernin Group and Mark Cuban, who is an advisor to the startup.

“There was a time not that long ago when you couldn’t wear sneakers and streetwear to nightclubs and restaurants,” McPheters, Stadium Goods’ chief executive officer, told TechCrunch. “But adoption of the stuff we are selling has continued to grow at a very large clip.”

The sale to Farfetch not only provides a major boost to the sneaker tech ecosystem, which is surprisingly much larger than those who aren’t familiar with it might have guessed, but its yet another successful e-commerce exit for Kirsten Green, the founding partner of Forerunner Ventures, who’s also backed Dollar Shave Club and Bonobos — direct-to-consumer retailers that sold for $1 billion and $310 million, respectively.

Stadium Goods founders John McPheters (left) and Jed Stiller.

Farfetch boarded the sneaker and streetwear hype train a while ago when it incorporated brands like Nike’s Jordan, some of which sell for more than $1,000 on the site. The company doubled down on sneakers earlier this year when it began integrating Stadium Goods products. After noticing high-demand, Farfetch founder and CEO José Neves tells TechCrunch, they began acquisition talks with the startup. Stadium Goods will remain independent as part of the deal, with McPheters and Stiller staying on to lead the brand forward. The company’s portfolio of shoes and apparel will be fully available on Farfetch’s e-commerce platform in the coming months.

“Luxury streetwear is a significant part of our business,” Neves said. “For many years now, we have had the largest collection of Off-White, for example, on the internet … What we did not have was the resale, secondary market. It was clear this was an interesting opportunity.”

Together, Farfetch and Stadium Goods will focus on international growth. McPheters tells TechCrunch Stadium Goods already had a significant international base of customers, but a partnership with Farfetch gives them the tools to go places they’ve never been before.

“In my mind, we are only just beginning,” McPheters said. “As more and more customers get comfortable with purchasing aftermarket items, we are going to continue to grow.”

The global athletic footwear industry is expected to be worth $95 billion by 2025. Meanwhile, sneaker resale is a $1 billion market and growing, fueled by a cohort of startups making it easier than ever for sneakerheads to locate rare shoes online and have them delivered to their doorsteps. That includes Stadium Goods, Flight Club, GOAT and StockX.

All four of these resellers, which ensure authentication of their products, are backed by VCs. Flight Club merged with GOAT earlier this year and together the pair raised a $60 million Series C. Before that, GOAT had brought in $30 million for its secondary market for collectible shoes from Accel, Upfront Ventures, Matrix Partners and more. StockX, for its part, has raised just over $50 million from Mark Wahlberg, Scooter Braun, Wale, Eminem, SV Angel and others.

According to Crunchbase data, VCs have funneled more than $200 million into sneaker startups in the past two years. Now, given the size of Stadium Goods’ exit, investment in the space will likely pick up significantly as other VCs hope to land an exit multiple that substantial.

Whether the reselling market will continue to expand is in question. Some have called it a bubble poised to burst, claiming it’s at its “height in popularity.” Why? Because corporate shoe brands like Nike and Adidas are keenly aware of the secondary market for their products and how they, too, can profit from it. If they decide to increase the supply of particular shoe models hot on the secondary market, they can radically disrupt the reseller economy. McPheters, however, says this doesn’t concern him.

“Brands need to strangle the demand to keep driving excitement in the space,” McPheters said. “They count on that hype to really move the needle.”

 


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Talkdesk nabs $100M at more than $1B valuation for its smart call centers

20:05 | 3 October

Talkdesk, the provider of cloud-based contact center software, has raised $100 million in new funding from Viking Global Investors, a Connecticut-based hedge fund, and existing investor DFJ.

The round values the company at north of $1 billion, Talkdesk co-founder and chief executive officer Tiago Paiva confirmed to TechCrunch, but he declined to disclose the exact figure.

The company, which uses artificial intelligence and machine learning to improve customer service, targets mid-market and enterprise businesses, counting IBM, Dropbox, Stitch Fix and Farfetch as customers.

“Imagine a company has a million customers and they want to reach out for support, what Talkdesk does is allow the customer to connect with a company in the best way possible,” Paiva told TechCrunch. “If you call into Farfetch, they will be using Talkdesk so they can see what products you’ve bought, what your tastes are, what you’ve complained about before. It gives them the history of everything so they can take care of your problem faster.”

Founded in Portugal in 2011, Talkdesk has offices in San Francisco and Lisbon. With the latest investment, it plans to expand to the U.K., as well as double down on its investment in AI. The company has previously raised about $24 million in equity funding, including a $15 million round in mid-2015. It also was a Startup Battlefield contestant at TechCrunch Disrupt NY in 2012.

“Today’s digital-first customers expect immediate and personalized answers, yet the majority of companies have not yet adopted a flexible, cloud-native platform to enable this level of agility and service,” DFJ partner Josh Stein said in a statement. “We believe that 2019 will be the year that cloud-based contact centers become the rule, not the exception.”

 


0

Farfetch acquires CuriosityChina to expand its social media efforts on the Mainland

02:24 | 20 July

Farfetch — the e-commerce startup that works with some 900 high end fashion boutiques and labels to present and sell clothes, shoes, accessories and jewellery online, and we and others have heard is gearing up for a $6 billion IPO — is making an acquisition to double down China, one of the fastest-growing markets for luxury goods.

It’s acquiring Curiosity China, a marketing firm that specialises in leveraging social media — specifically, WeChat — to target users and sell goods. It already works with some 80 brands that are also customers of Farfetch to help them use WeChat channels and accounts to reach would-be customers. It also offers CRM and a few other services.

The plan will be to incorporate Curiosity China into Farfetch’s “Black & White” white-label API, which essentially allows boutiques to integrate their stock into Farfetch’s purchasing and logistics platform, or use that engine to sell its goods on their own sites. This will now give them the option also to use the API to run campaigns in China.

Terms of the deal have not been disclosed. This is Farfetch’s third acquisition, the other two being UK boutique Browns and Style.com. Farfetch also said it is buying all of the company’s tech and all of its employees and founders are coming on board.

Judy Liu, a co-founder of CuriosityChina, will become Farfetch’s managing director for China; another co-founder, Alexis Bonhomme, is taking on the role of VP commercial, China; and the third co-founder, Arthur Shui, will become head of technology for the Chinese operation.

Farfetch’s acquisition of CuriosityChina underscores a few interesting trends currently underway in the market: the rise of the Chinese consumer, the ongoing challenges to target those consumers if you are from outside China, and the rise of social media as a popular marketing and sales channel.

The luxury market was worth €262 billion in 2017, according to analysis from Bain, with customers from China accounting for 32 percent of that amount (shopping both in China and abroad). It turns out that among those buyers, social media — and specifically WeChat — is one of the most important routes to reach customers and for those customers to subsequently buy things, including directly in those social channels.

Curiosity China will fill a gap for Farfetch as it works on ways of expanding its revenues by tapping those two trends. Today, the Asia Pacific region already accounts for about one-third of the company’s sales (it doesn’t break out China) — a decent bedrock on which to build.

But most of those sales today are coming by way of people shopping on Farfetch.com, and so the idea is to tap into the popular channel of the moment to grow those numbers in a complementary way.

“WeChat is the most important channel for commerce in China, so we want to see where it will go,” said Giorgio Belloli, Farfetch’s chief commercial and sustainability officer. “It’s where brands are focusing at the moment. They understand Chinese consumers are using dedicated channels on there for marketing and purchasing.”

On the part of retailers and brands — the other side of Farfetch’s marketplace — they have found it traditionally hard to reach Chinese consumers, and the idea is that this will also help them do that.

For now, there are no plans to expand Curiosity China’s model to other markets beyond its home country. Belloli said that although Farfetch has been keeping its eye on messaging everywhere, and despite the efforts of Facebook to replicate the same commercial experience, so far no other messaging app has managed to break through as a strong channel for fashion commerce as WeChat has. It will be interesting to see whether and how that evolves over time.

 


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JD.com invests $397M into luxury marketplace Farfetch as part of a new strategic partnership

09:40 | 22 June

JD.com, China’s second-largest e-commerce company after Alibaba, is pumping $397 million into Farfetch, a marketplace for luxury brands, as part of a new strategic partnership. JD.com founder and CEO Richard Liu will take a seat on Farfetch’s board as part of the deal, which makes JD.com one of its largest shareholders.

Last year, Farfetch raised $110 million specifically to support its expansion in Asia. China, where Farfetch launched in 2014, had already become its second-largest market by the time that round was announced in May 2016. Farfetch currently partners with 200 brands and 500 multi-brand retailers there and its new alliance with JD.com will give it access to JD.com’s wide logistics network (including JD Luxury Express, its premium courier service), online payment and consumer microcredit tools, social media resources such as its partnership with WeChat, and big data.

The partnership also helps Farfetch stake its territory in China and fight against counterfeit products, a point that founder and CEO Jose Neves highlighted in his press statement.

“We are deeply honored and excited to be announcing this partnership with Richard Liu and JD.com,” he said. “China is the world’s second-largest luxury market, and we are delighted to have such a respected partner, known for its strict protection of IP, with whom to address Chinese luxury consumers.”

In return, JD.com gets an important ally as it focuses on high-end retail to help it differentiate from Alibaba, which despite various anti-counterfeiting efforts is still saddled with a reputation as a haven for knockoffs. China’s luxury market continues to grow steadily despite economic uncertainty and the government’s anti-corruption campaign, which put a damper on high-end sales when it launched in 2012.

JD.com’s other efforts to attract affluent consumers include holding runway shows in fashion capitals like New York and Milan, hiring a new president of international to develop partnerships with global brands, and launching JD Fashion as its own business unit.

Featured Image: Dan Dalton/Getty Images

 


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Farfetch grabs another $110 million for its fashion marketplace

22:46 | 4 May

Farfetch is growing like crazy as the company just secured $110 million. The London-based startup has become a dominant e-commerce player in the fashion space. Farfetch runs a marketplace that connects high-end fashion retailers with customers. But the company doesn’t plan to stop there.

Today’s Series F round was led by Temasek, IDG Capital Partners and Eurazeo. Existing investor Vitruvian Partners also participated. Farfetch also secured a $50 million credit line to boost its growth. Previously, the company raised $86 million in March 2015.

In 2015 alone, Farfetch managed $500 million in transaction value. And because of its marketplace approach, the company takes a cut on every transaction.

But Farfetch isn’t anything like eBay or Amazon Marketplace. The company focuses on fashion brands and wants to help them seamlessly integrate offline and online transactions in a unified experience.

That’s probably also why Farfetch has been working on a white label platform solution. As you can see on ManoloBlahnik.com, you can purchase high-end shoes directly on the company’s website. Behind the scene, Farfetch runs the show.

While Farfetch doesn’t manage inventories, the startup can connect directly to your inventory and provides impeccable customer support with in-store pick-ups, same-day deliveries in major cities, pick-up service if you want to return an item and more.

So for a small fashion brand, using Farfetch’s platform could make it much easier to start selling online. You don’t need to make compromises and allocate part of your inventory to the online platform.

As usual, the company is going to use today’s funding round to conquer the world. Farfetch wants to invest in its own marketplace and its white label platform solution. And this is smart, as off-site growth could be a big market for Farfetch given that fashion brands already know how to talk with loyal customers.

 


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European Fashion Startups See High Growth Potential In The Global Online Sales Market

15:17 | 7 December

Europe is known for its high-end fashion culture, and technology seems to be making it easier for the world to discover and access those much sought-after items from this region of the world. But there are differences in discovery and online shopping trends from culture to culture throughout the globe.

Fashion startup founders from Farfetch, Chic by Choice and Snap Fashion came onto the Disrupt London stage Monday to discuss the different markets and how they are grabbing onto these new discovery models in the fashion industry.

“We’re all new to this,” Farfetch founder Jose Neves, whose startup aims to help consumers locate items from small, high-end clothing boutiques, said onstage. He also mentioned that only 6 percent of all his sales are from online and that 94 percent are still in physical sales.

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Fashion Forward: Jenny Griffiths (Snap Fashion), Filipa Neto (Chic by Choice) and Jose Neves (Farfetch)

“One of the biggest changes will be how does the digital store merge with the physical store,” he said.

Snap Fashion’s Jenny Griffiths agreed, predicting the future will be about the intersection between discovery and curation. “I think there’s going to be a lot of people coming up with that fashion experience that you sort of get from High Street to online,” she said, referring to London’s physical shopping district.

There are so many new ideas and business models. I think you’re going to see a lot of new online sales,” Neves said.

One of the places Neves mentioned seeing a lot of success is in the U.S., which is his No. 1 market. Interestingly, China sits at No. 3 for his boutique shopping platform.

“It’s good to find who has purchasing power and who is this person,” Chic by Choice’s Felipa Neto mentioned onstage. “It’s actually been quite a journey.”

All three seemed to agree it’s still early days in the online fashion meets technology industry. Neves does not see department stores going away, but does see a way for online and offline to work together. Neto, whose startup has been compared to Rent the Runway for Europe, reiterated the 94 percent physical purchase stat Neves mentioned earlier. She sees a lot more room for online shopping to grow throughout the world.

  1. Jenny Griffiths (Snap Fashion), Filipa Neto (Chic by Choice) and Jose Neves (Farfetch) (1 of 9)

  2. Jenny Griffiths (Snap Fashion), Filipa Neto (Chic by Choice) and Jose Neves (Farfetch) (5 of 9)

  3. Jenny Griffiths (Snap Fashion), Filipa Neto (Chic by Choice) and Jose Neves (Farfetch) (9 of 9)

  4. Jenny Griffiths (Snap Fashion), Filipa Neto (Chic by Choice) and Jose Neves (Farfetch) (8 of 9)

  5. Jenny Griffiths (Snap Fashion), Filipa Neto (Chic by Choice) and Jose Neves (Farfetch) (7 of 9)

  6. Jenny Griffiths (Snap Fashion), Filipa Neto (Chic by Choice) and Jose Neves (Farfetch) (6 of 9)

  7. Jenny Griffiths (Snap Fashion), Filipa Neto (Chic by Choice) and Jose Neves (Farfetch) (4 of 9)

  8. Jenny Griffiths (Snap Fashion), Filipa Neto (Chic by Choice) and Jose Neves (Farfetch) (3 of 9)

  9. Jenny Griffiths (Snap Fashion), Filipa Neto (Chic by Choice) and Jose Neves (Farfetch) (2 of 9)

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