We’ve written about the rapid growth of online sample sales; with the latest news coming from the rumored acquisition of European sample sale site Vente-Privee by Amazon for an estimated $3.01 billion . Today, online shopping site Ideeli, which was founded in 2007, has raised $20 million in funding, according to an SEC filing. We’ve contacted the company for further comment. Prior to this round of funding, Ideeli raised $3.8 million from Kodiak Venture Partners.
The amount raised isn’t surprising considering that similar startups in the online sample sales space like Gilt Groupe, and Hautelook are all raising huge amounts of money, growing their user base at a rapid pace and turning a strong profit. Gilt recently raised an estimated $40 million in funding in July, which valued the company at $400 million. VC firm Kleiner Perkins recently invested in One Kings Lane, an online sample sale site for home decor and accessories, which we wrote about here. The concept has even attracted retail giants like Saks and Neiman Marcus, which are now jumping on the bandwagon to offer their own private sales.
The basic idea behind the online sample sale model is this: big designers, such as Marc Jacobs or Versace, place excess inventory on a sale site at 50 to 70 percent discounts over a several day period. The sales are private, available only to members, with upcoming sales from brands announced via emails. Products include clothing for men, women and children as well as jewelry, handbags and home accessories. You can get invites from other members or request invites via the site.
A few months ago, I spoke with Ideeli’s CEO Paul Hurley, who revealed that the site just hit one million members and is set to do $50 million in revenue this year. Hurley expects to do $175 million in revenue next year.