One Kings Lane, an e-commerce company for home decor and furniture, has raised $112 million in Series E funding, bringing the company’s total funding to date to $229 million. The round was led by new investor Mousse Partners, with two public market institutional investors (who wish to remain undisclosed) also joining as new investors in the round. The company’s post-money valuation in the round was just shy of $1 billion, at $912 million (up from $440 million in the company’s Series C round).
All existing investors participated in the round including Scripps Networks Interactive, Kleiner Perkins, Greylock Partners, IVP and Tiger Global Management. Charles Heilbronn, Chairman of Mousse Partners, will be joining the Board of One Kings Lane, were told.
One Kings Lane, which has its origins as a flash-sales site for home decor, fashion accessories and more, is the brainchild of former merchandiser and fashion executive Susan Feldman and digital media exec Ali Pincus (who happens to be the wife of Zynga co-founder Mark Pincus).
Launched in 2009, One Kings Lane differed from some of its competitors like Gilt and RueLaLa by focusing on a single vertical: deep discounts on all things home. Since that time, OKL has expanded into other areas beyond the home, including jewelry and accessories. And more recently, OKL expanded into producing its own branded merchandise such as candles and bedding. The company says it now has 10 million members, which is up from 6 million in 2012.
In contrast to the Amazon model, One Kings Lane is an aspirational brand, says CEO Doug Mack. But that doesn’t mean shoppers are necessarily paying much more. Mack maintains that the site has broad appeal, with 60 percent of the items on the site under $100. Last year, One Kings Lane launched a new vertical, entering into the marketplace model with Hunters Alley. Hunters Alley focuses on selling consumer-to-consumer, similar to the way eBay operates. So far, this new venture has done fairly well, Mack says, with results well above expectations.
Curation is another area that One Kings Lane has been known for, long offering Tastemaker Tag Sales, which allows well-known interior designers and celebrities to select sales of home decor items from around the world. In terms of branding and partnerships, One Kings Lane is able to participate early on with a number of successful marketing and development opportunities, including a significant part of the hit Bravo TV interior design reality show, “Million Dollar Decorators.” And One Kings Lane has dabbled in its own content on TV with commercials.
With Scripps as an investor, the company expanded this with integrations on the network’s hit series “Design Star,” as well as spots on HGTV. One Kings Lane has also debuted a partnership with Starwood.
As for sales, Mack wouldn’t reveal numbers. As of 2012, he says, One Kings Lane had around $200 million in sales, and sales have definitely increased. He said that OKL saw a record fourth quarter last year, and enjoyed a record week in sales last week. Sales from mobile devices are now one-third of the company’s total revenue, and he says mobile traffic continues to grow at a fast clip. As of last year, OKL was unprofitable.
Mack explains further that with the large amount of capital raised, the company’s in no hurry to IPO, but does want to focus on building itself into a long-term major brand business. Beyond just funding new ventures like Hunters Alley, OKL plans to double down on personalization and data mining to improve the product experience. One of these features, says Mack, could be giving merchants intelligence on what types of items to sources based on customer interest. Other areas where OKL will be focusing on is better search and developing mobile.
And the company doesn’t plan to add additional verticals in the near future, adds Mack.
I’m personally a huge fan of One Kings Lane and shop on the site on a regular basis. I also love the story of the founders who have a genuine passion for home decor and style, which shows in the way OKL merchandises its products. In short I want the company to win.
But e-commerce in a post-Amazon world is tough. Fab has had its troubles and the flash-sales model hasn’t churned out many billion-dollar businesses. In fact, there are only a handful of e-commerce companies that have successfully been able to build a billion-dollar-plus business in e-commerce (without having physical stores) in a post-Amazon world.
Zulily, which focuses on kids clothing and merchandise for moms and also has a flash-sales model, is one of those companies. Another one is Boston-based Wayfair, which competes with OKL with its Joss & Main vertical, but has focused on a broader market in general.
There is still an opportunity, however, in creating a powerful niche brand.
Boosting personalization and data mining is one way that OKL can differentiate itself (an area where Zulily has been particularly masterful). Media and brand partnerships can help with exposure. But what will help the company is creating a product that continues to delight customers, new and old, and creates loyal buyers.
In a world where there are so many options for the “where” to buy an item, I am going to go for the one that makes me feel like I am getting a good deal on something that I desire — whether that be a piece of furniture or a vase or a frame. OKL has done that for me; hopefully it can accomplish that for others.