Wantful, a San Francisco and New York-based gift giving and personalized e-commerce startup founded in 2011 is shutting down after failing to secure follow-on investment. According to founder and CEO John Poisson, the company had launched a series of well-received products for web, tablet, print and in-store, but did not achieve the kind of “highly accelerated growth” needed to secure the additional capital.
One of those additional investments, as it turns out, was from Nordstrom, which had taken a stake in the startup earlier this year. A Nordstrom spokesperson claims the retailer was “just a small minority investor,” and declined to comment further on Wantful’s shutdown.
Poisson agrees that the closure should not be characterized as being directly related to the Nordstrom investment, or lack thereof. “As a startup, we were looking for additional capital. We looked to the venture capital markets, but didn’t have the growth curve required as a post-Series A company.” Nordstrom, he adds, was a great partner, “but you can’t look to a strategic partner to fund the whole business.”
Wantful had a number of other high-profile investors, including Polaris Venture Partners, Harrison Metal, Greylock, Forerunner, and angels Arjun Sethi, Dave Morin, Matt Mullenweg, and others. In total, it had raised $5.5 million in Series A funding.
Poisson says that Wantful was looking beyond Nordstrom and the Series A investors, for additional investment.
When the company first launched ahead of the holiday shopping season in 2011, it began by offering personalized product recommendations for those you were buying gifts for, after you first provided the site with information about your friend’s gender, tastes and preferences. Around a year later, the company introduced what it called “phase two” of its vision, introducing both an iPad application and print magazine to the lineup.
At this time, Wantful began moving away from gift-giving and toward more personalized e-commerce. That is, instead of just finding gifts for friends and family, users could find items for themselves as well. But this move also put the startup up against a host of competitors, including other e-commerce services and aggregators like Wanelo, Wish, Fancy, Svpply’s Want, Polyvore, and more.
In addition to the iPad app which blended both content and commerce, Wantful also tried a different approach by sending its most active customers their own personalized, print magazine featuring stories about retailers and products.
Today, the Wantful website informs visitors that the company has suspended operations, but customers can reach out via email for support. (Clicking the “OK” button to close the message just feels wrong, though, you know?) Wantful had a number of happy customers, and the service will be missed.
Still, it seems inevitable there will be some consolidation in the personalized e-commerce space in the months ahead. Poisson agrees, noting “it’s difficult in the later stages of an e-commerce business to get the kind of growth curves venture capital naturally and rightfully looks for – it’s easy to get a start, to get a toehold – but it’s difficult to really scale that mountain,” he says.
Meanwhile, other companies grow quickly out of the gate, like flash sales and daily deals, for example, but those that survive end up having to pivot from those earlier models, as we’ve seen. As for Wantful, the company was trying to build a long term, high value customer relationship, but it didn’t scale as quickly as it needed to.
Though Wantful has suspended operations, Poisson notes that they’re “looking at all their available options” before entirely shutting down.
The company had 16 employees at the time of closure. Poisson declined to comment on customer base, transactions, or revenue.
Below, the full blog post from CEO John Poisson, detailing the shutdown:
I’m profoundly disappointed to announce that Wantful has suspended operations.
We accomplished a great many things in our 18 months in market: an enormously well-received gift offering; widely-lauded experiences for web, tablet, print, and in-store; a network of 600 vendors creating the most exceptional products around, with a robust and streamlined logistics architecture to support them; an assortment and an approach to content that inspired and engaged; and the brilliant and tireless team responsible for it all.
What we did not accomplish yet—both by circumstance and execution—is the kind of highly accelerated growth required to secure later-stage venture capital, despite the enduring enthusiasm around what we’ve built.
The coming holiday season was shaping up to be pivotal for us, but the loss last week of a planned follow-on investment leaves us little time to secure an alternate source of capital, or to pursue the other opportunities on the table.
Our top priority right now is exploring all our options in an orderly fashion—and in taking care of our customers and the team—but if I can be of assistance please reach out to me personally.
Whatever the outcome, we’re deeply grateful for the support and encouragement we’ve received from our customers, friends, investors, and partners through these past two years, and honored to have had the opportunity.