Fab may have stumbled in its aggressive march on the European market, but the Samwer brothers and their Rocket Internet e-commerce incubator are using the moment to shore up its competitor in the online home design market. Westwing, a portal currently active across 10 markets, is today announcing a new funding round of €72 million ($99 million) from Rocket Internet regulars Fidelity Worldwide Investment, as well as existing investors Odey and Tengelmann, and others.
“We are very excited to have the support of such internationally renowned investors. Their funding represents strong confidence in our rapidly growing business,” said Stefan Smalla, founder and CEO of Westwing. “We will use the investment to reinforce our position as a pioneer in the home and living e-commerce market. We constantly strive to offer the best interior design brands, latest trends and products, and to create the best possible customer experience for our more than 12 million members.”
In total, Westwing has raised €150 million since 2011.
Slightly uncharacteristically for a Rocket Internet portfolio company, Westwing is coming clean with a few metrics about how the company has been doing to date in the markets where it is active – Germany, Italy, Brazil, Russia, France, Spain,Poland, Netherlands, Switzerland, and Austria. In the last 2.5 years, it has tripled its net revenues, which were €110 million in 2013, €41 million in 2012 and €0.5 million in 2011. It says that in 2013, it sold more than 2.8 million products, with more than a third of sales already conducted on mobile devices.
Its growth comes at an interesting time in the European market — Westwing’s primary center of operations, excepting Brazil. Europe been in the middle of an economic recession in several countries — the sort of trend you would expect would hit spending on home decor, which is often discretionary.
At the same time, rivals like Fab.com have retrenched from their original business models tackling the region.
Originally Fab.com had projected that Europe would account for 20% of revenues back in 2012, when the company was buying up me-too regional sites and eyeing up the opportunity. Then came layoffs and what appeared to be a changing international focus to Asia. Earlier this year, Fab whittled down its European offerings further, cutting out smaller designer items and focusing only on custom-made furniture.
All the same, there is an opportunity for the taking. Westwing estimates that the global home & living market exceeds €400 billion annually, “similar in size to the fashion market, but at an earlier stage in the shift to online.”
In that context, either Westwing is seeing an opposite effect to what has impacted Fab.com, or it sees an opportunity to lay some groundwork for when the tide will turn, given the already decent results.
“Westwing’s scale and achievements after only two full years of operations are impressive,” said Colin Stone, portfolio manager at Fidelity Worldwide Investment, in a statement. “We are very pleased to be part of this successful growth story. Westwing has built an innovative logistics setup in its 10 markets, has established strong customer loyalty and stands for a distinctive and high-quality offering.”
That’s not to say that Westwing has not been without its own stumbles. In 2012, the Samwers killed off their more overtly Fab.com clone Bamarang and ended up folding those operations into Westwing.
Other investors in the company include Access Industries, Holtzbrinck Ventures, Investment AB Kinnevik, and Summit Partners.