Some “focus” and consolidation afoot in the world of online eyewear sales. Prescription Eyewear, the parent company of GlassesDirect.com, high-end myOptique.com and SunglassesShop.com, has acquired LensOn.com, a Northern European leader in selling contact lenses online.
The financial terms of the deal were not directly disclosed, but to facilitate the acquisition, Prescription Eyewear has raised an additional £12 million ($19.3 million) from Index Ventures and other investors, and I understand that the bulk of that was used for the purchase.
Index has been very active in the European VC investment market of late. Just earlier today, the customer reviews site Trustpilot announced a €10 million investment led by Index as well. The VC has been very bullish on e-commerce in general, with one of its bigger investments this year leading a $40 million round in L.A. vertically-integrated fashion site Nasty Gal.
The total funding now raised by Prescription Eyewear is now £32 million, which the company likes to say is on par with what Warby Parker, the upstart, vertically-integrated online eyewear company in the U.S., has raised to date. The combined company expects to have gross retail sales of £30 million ($45 million) in 2012 and says that it is profitable.
According to Prescription Eyewear’s American CEO Kevin Cornils, the idea behind the purchase of LensOn to to further expand Prescription Eyewar’s portfolio into the area of contact lenses, completing the selection of eyewear it offers to consumers.
By way of GlassesDirect, Prescription Eyewear was one of the first on the market in Europe to offer online glasses purchasing, and Cornil likes to joke that it was also a good template for Warby Parker, having pioneered years ago the concept of sending several pairs to someone’s house to try out before purchasing. “We would say Warby has been inspired by us,” he said in an interview.
But similarly, GlassesDirect is taking a page from Warby Parker — Cornils says it is doing “a great job in disrupting the U.S. market with a designer experience but at a much lower price” — and adding more vertical integration into its own business model, which has otherwise been focused on competing against physical stores with brand-name selections.
He says that the new approach has so far come in three waves: London Retro, the company’s in-house brand of glasses “entirely created by us, great quality and great style”; Elements, glasses made from recycled products; and Scout, the company’s line aimed at a younger and hipper demographic.
The combined company will give Prescription Eyewear a much more international footprint — the deal will mean that now more than 60% of sales will come from outside of GlassesDirect’s UK home market. And it says it will make it Europe’s largest online glasses e-commerce company, not just in terms of revenues but also users: 2012 will close off with 8.2 million unique visitors across 100 countries and sites in 12 languages. Actual customer numbers, though, are a bit smaller: 750,000 in total, shipping 2,000 pairs of eyewear daily.
Taking just Europe alone, there is a lot of potential for growth. The eyewear market is worth $32.5 billion in the region, but only 3-4% of that is online, with many still wedded to the idea of combing through dozens of styles in physical stores. But with bellwether verticals like fashion continuing to grow and thrive on the internet, Prescription Eyewear is confident to ID a “€3-4 billion opportunity” in the European market in the next three to five years. And contact lenses, which don’t require any trying on, is a potentially easier way of working into that potential.
The founders of LensOn, Kim Persson and Johan Bergenheim, plan to stay on post-acquisition to help expand its business — so far strongest in Northern European markets like Denmark, Sweden, Finland and the UK — into other continental markets like Germany and France.