Hem, the Berlin-based home furnishings company that Jason Goldberg created last year as a pivot out of his flashy-but-challenged e-commerce portal Fab.com, is close to sewing up another acquisition. It is buying Disclipline.eu, a startup based in Italy that produces and sells a small line of furniture and other objects designed by independent studios.
Sources close to the company say that the deal will close and be announced Tuesday of next week. Goldberg declined to provide a comment but has made no secret of his interest in Discipline’s products.
While Fab.com has shut down in Europe and elsewhere, it has continued its operations as a marketplace for third-party goods in the U.S. while looking for a buyer. Hem, meanwhile, is building a new brand around selling a pared-down selection of original goods aimed at the higher end of the market.
This is where Discipline fits in, with a focus on natural materials and slick and modern pieces from a small group of up and coming designers.
This looks like the fourth acquisition that Goldberg has made to fill out his concept of a vertically integrated home furnishings designer, maker and seller. Others include, in reverse chronological order, OneNordic (aka “the luxury Ikea”), and furniture retailers MassivKonzept in Berlin and MyFab in France. It was through the Berlin acquisition that Hem (and Goldberg) set up the new HQ for Hem in the city.
The logic behind the Discipline acquisition is to gradually scale up Hem’s business with more inventory and infrastructure.
By producing the objects that it’s selling, Hem cuts out the “middle man” in the retail chain and reduces the price in the process, while keeping a good margin for itself. By bringing more items, design and manufacturing talent, and customers into Hem’s existing operations, it will also improve the company’s economies of scale.
Over a period of a few years, storming into the market with a vision of being the fashionable consumer’s answer to an eBay marketplace, Fab.com had raised over $330 million in funding with an eventual valuation of around $1 billion.
But, as Goldberg has explained, the struggle of keeping up with inventory and other logistics, maintaining a healthy margin, and simply keeping customers returning for more or growing its overall user base, all proved too challenging. With Fab at one point burning through $14 million per month, layoffs and office closures ensued while Fab regrouped.
In the process of pivoting, Goldberg has said that Hem is not only backed by the investors and funding originally behind Fab.com, but it is also keeping Fab’s $1 billion valuation, too.