HipVan, an online furniture store based in Singapore, has closed a $3.3 million Series A funding round. The investment was led by Golden Gate Ventures, the Singapore-based VC that recently announced its second, $50 million fund, with participation from East Ventures and existing backers Skype cofounder Toivo Annus and LionRock Global.
HipVan is probably best thought of an online version of Ikea. The company, which was founded in January 2013 and had previously raised $1.4 million from seed rounds, started out offering ‘hip’ items in limited quantities — hence the name — but expanded to offer a more complete listing of home furnishing items.
The company’s four cofounders met at Rocket Internet, where they held various central positions within the German company’s sprawl of e-commerce businesses across Southeast Asia. HipVan cofounder and CEO Danny Tan explained to TechCrunch that his company is addressing the opportunity that has emerged as online shoppers mature and gain disposal incomes — requiring different items as they get married, start families, etc — and awareness and usage of e-commerce increases, too.
HipVan currently offers 20,000 SKUs (products), with more than 150,000 visitors coming to its site each month. Orders have grown 370 percent year-on-year and 40 percent come from mobile devices (mobile accounts for 60 percent of traffic), but Tan declined to provide more specific financial details for the business. He does believe, however, that the company is well positioned to take a slice of Singapore’s home furnishing market, which he estimates to be worth a cool $2.1 billion annually.
The company, which currently has 60 staff, this year moved to offer its own products under its own brand. That, Tan explained, allows it expand its appeal to new consumers and demograpghics by offering high quality products at more affordable prices. The company also has an interesting — and inherently community-led — approach to introducing new brands to its site. It runs weeklys flash sales, with up to 30 new additions, and elects which products and companies should have a more permanent home on its site based on sales and feedback from customers.
Golden Gate Ventures’ founding partner Vinnie Lauria told TechCrunch that he first met Tan at a hackathon event in Singapore, and he’d kept in touch with him since then. The VC firm has invested in a number of e-commerce startups — including social selling app Carousell and e-grocer Redmart — and Lauria believes its portfolio, network and expertise can help HipVan fulfill its potential.
On that note, Tan declined to be specific about regional expansion plans. While Singapore is one of Southeast Asia’s most affluent markets — in terms of general economic levels and consumer spending power — it has a population of less than six million so you’d expect that HipVan will move into other parts of the region over time. Many e-commerce startups choose to refine their offering in Singapore first, before taking exporting it out to new markets where the economics and consumer behavior is very different.
Another thing to note from this deal: this is the largest check Golden Gate Ventures has cut to date. Lauria previously told TechCrunch that its new fund will see the firm target more mature startups and make Series A investments — its initial fund was focused on early stage — so we can expect to see more on that front, too.