natural products
Rich Demb

Abe's Market, Natural Products Retailer, Closes $3.4 Million Series A Investment

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A Chicago-area startup that sells natural consumer goods online, Abe’s Market, closed a $3.4 million series A investment the company announced today. Accel Partners led the round, joined by the company’s earlier investors, Index Ventures and several angels.

Abe’s Market calls itself the equivalent of an online farmer’s market, and focuses on selling non-food category natural products like beauty, bath, baby or cleaning items, though it also sells some packaged comestibles.

The site provides shoppers with tagging, reviews, and social media sharing tools and incentives. The company has also put shoppers in touch with the people behind the products sold on its site, via live “online shows” and other site content.

Abe’s Market co-founder Richard Demb said in an interview Wednesday night that his company plans to use its series A funding on expanding its reach via digital marketing initiatives, taking advantage of social media technology and trends.

Longer term, Demb said Abe’s Market will seek to build features and services that can help sellers who work with the site to grow their small businesses. In particular, the company wants to leverage the collective buying power of small sellers, for products and services that they all need — for example, labels, tags and printing services they need to package their goods, hopefully using sustainable materials.

Demb explained:

“The community of sellers we’re tapping into loves talking about what they are doing. We will frequently get groups of our sellers together, in meetings to learn about what’s going on in their lives, and not just what’s going on in their online business. We want to know how we can be a facilitator to help small businesses that make great products, and let them grow.”

Prior to starting Abe’s Market (with co-founder Jon Polin) Demb co-founded Popcorn, Indiana the company behind those bright red bags of Dale And Thomas kettle corn you see at Whole Foods. His co-founder in that endeavor, serial entrepreneur Warren Struhl, is now an investor in Abe’s Market.

Demb said the experience of working with massive retailers online and off helps him relate to his sellers as much as consumers who are curious about their products. Abe’s Market now works with some 300 brands. Demb would not comment on how much revenue he expects the company to reach by the end of the year or how many customers it has.

According to an Organic Trade Association 2010 survey referenced by the company in a press statement, the U.S. organic food and non-food sales reached $26.6 billion — up 5.3 percent from 2008-2009 — with non-food products up over 9 percent.

Adam Valkin, a partner at Accel Partners — which had earlier invested in other online marketplaces including Etsy, Diapers.com and Modcloth — told TechCrunch:

“Abe’s Market may have overlap with a lot of segments, and there are a lot of players in [specialty commerce]. But both co-founders have strong marketing backgrounds, and understand what it takes to build a differentiated brand experience and awareness about their own brand, and their sellers, too.

Building this media and marketing machine that you know gets the word out, in turn affects their ability to recruit the most desirable sellers and brands.”

Abe’s Market will compete to sell its premium, natural products against ecommerce players from fellow startups like SaffronRouge which focuses on all organic beauty products, to DailyGrommet which focuses on products made by small businesses, and against sections within goliath ecommerce sites like Wal-Mart.com/Sustainability.

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