Flash sales site HauteLook has raised $31 million in Series C funding, led by Insight Venture Partners. The startup previously raised $10 million in Series B funding last year.
Thanks to the immense popularity of members-only, online sample sales, HauteLook has grown to 2.5 million members since launching in 2007. The site has partnered with more than 1,000 brands to date, offering more than 2,500 sale events in women’s fashion, men’s fashion, accessories, kids’ clothing and toys, home and beauty.
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.
The new funding will be used toward member acquisition strategy and to expand to new categories such as gourmet food, wine, and other services. The company is also looking to boots its social media and mobile offerings.
The flash sales space is definitely competitive; and the amount raised isn’t surprised The amount raised isn’t surprising considering that similar startups in the online sample sales space like Gilt Groupe, and Ideeli are all raising huge amounts of money, growing their user base at a rapid pace and turning a strong profit. In fact, Gilt just raised $35 million in funding a few weeks ago. 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.