ShoeDazzle, the online shoe and fashion retailer endorsed by Kim Kardashian and backed by Andreessen Horowitz, Polaris, Lightspeed and others, has raised another $6 million in a mixture of equity and debt, according to a filing with the SEC. The news comes on the heels of a tumultuous month for the company, in which Bill Strauss left the role of CEO to be replaced by founder Brian Lee, amid questions (but no official statements) about what might have happened to spur the change.
We have reached out to the company to find out who exactly is involved in the round, whether there is another raise coming as part of this, and other details, but we have yet to hear back regarding this.
Raising more money has been something on the cards for at least a couple of months now. When I spoke to Strauss in August when he was still CEO, the company was already talking to investors for more fundraising, he’d told me.
Areas that Strauss had noted might be more of a focus going forward included mobile, but he ruled out international expansion — a route taken by one of its biggest competitors, JustFab, which earlier this year picked up another $76 million funding, much of which it will be investing in a big international push. Those priorities may have changed with the change in leadership.
ShoeDazzle in August reported that it had reached 13 million members, growing by 3 million over four months. ShoeDazzle has been keen to demonstrate that it has continued to grow as a business after dropping a mandatory subscription policy in March.
That earlier policy required users to pay $39 per month regardless of whether they bought shoes or not, and the thinking had been that dropping the policy would help boost user numbers and purchases — although the company has not said whether overall revenues have been helped or hindered by its change in business model.
Separately, that subscription model has been spurring controversy of its own, specifically as it relates to JustFab, which some are accusing of not making its terms and conditions clear enough to new users. Adam Goldenberg, the co-CEO of JustFab, tells TechCrunch that he was “surprised” by the complaint:
“Our subscription policy clearly states that any subscriber can skip (opt out) any month, as long as it’s by the 5th. Essentially, you can be a VIP member and never be charged. Also, it’s important to note that even if you don’t skip, you can use that credit for future purchases. Customer satisfaction is VERY important to us and we have millions of members who love our service (the personalized styling and on trend product for a great price). I find it very unusual that this complaint claimed that they have not heard from us in over 8 months. Every month we email members to let them know they’re boutique is ready for viewing and send multiple reminders to take action. Their first shipment also included a VIP welcome letter that reiterested the terms of their membership. I firmly believe this complaint is a VERY unusual outlier and does not represent 99%+ of our members.”
But back to ShoeDazzle: here’s something eye-catching about its Form D: The filing — dated September 19, before Lee’s return as CEO was made public on the 24th — lists some new names compared to ShoeDazzle’s Form D from its last round of funding, from May 2011. They include CMO Jonathan Sills, chief talent officer Penny Handscomb, and CFO George Richards, all of whom are listed as executives, alongside general counsel Richard Jun. They were all appointed by Strauss.
Interestingly, although he is now the CEO, Brian Lee is only listed as a director this time around — whether that is an oversight or something else is unclear.
This filing takes the total amount raised by ShoeDazzle to $66 million.
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