Made.com, a web-based furniture company, has raised £2.5million from investors to launch its service which connects buyers directly with manufacturers thus cutting out middle men. It will launch initially in the UK, aiming to slash the cost of designer furniture.
The backing comes from Lastminute.com cofounder Brent Hoberman now of mydeco.com, PROfounders Capital (whose investors include Michael Birch ex of Bebo), investor John Hunt and Marc Simoncini through his investment vehicle, Jaïna Capital.
There are still a lot of inefficiencies in the furniture retail industry where furniture can be sold for six to ten times its factory price. The UK homewares market is worth about £26billion but it’s very fragmented – the biggest players like Argos and John Lewis combined add up to just 10%.
Made.com aims to more than halve the price of contemporary furniture by cutting out wholesalers and retailers. But the quality of the chair or sofa stays the same – just the middle guys are gone. The site will focus on designer furniture, sofas, chairs, tables etc but could move into textiles for example.
“The internet helps us provide total transparency and strip out the middlemen,” says Ning. It perhaps helps that Ning was born in China, in the city of Foshan, which is the country’s major manufacturing base for furniture. Made.com is working with 20 manufacturers at launch, most in the far East right now and some of them are British manufacturers especially in the upholstery area. In the UK 80% of furniture comes from China.
The designs will be crowd-sourced, with customers voting for the ones they like. The most popular designs go into production and the people who voted can buy at a discount. At launch the site will work with designers who are not yet well known names including Luka Stepan, Steuart Padwick, and Alexander Purcell.
Orders are then placed direct with a manufacturer for mass production in container quantities from factories in China. The orders will be shipped to the UK and their progress is trackable on the web site. Thus there is no unsold inventory and no wastage.
The PROfounders investment is the second it’s announced after Tweetdeck.