LONDON, United Kingdom — Today, BoF can exclusively reveal that curated fashion marketplace Farfetch.com has raised a new $18 million round of funding from Index Ventures, eVenture Capital Partners and existing investors Advent Venture Partners, bringing the total amount of capital the company has raised to date to almost $25 million. The valuation of the company in this latest round was not disclosed.
Founded in 2008, the London-based Farfetch is an online marketplace for fashion that connects consumers with carefully selected product from a large global network of more than 100 independent boutiques.
“The online channel is growing tremendously, but it’s often difficult for small or even medium size businesses to create the teams and the platform to successfully reach a global online audience,” Farfetch founder José Neves told BoF. “I realised that the selection of these cutting-edge boutiques was really relevant to global fashionistas. You had boutiques such as RA in Antwerp stocking Meadham Kirchhoff, John Rocha or Rodarte which may have been sought by someone in Singapore or Sydney, but they were really constrained by geography.”
The injection of new funding will allow Farfetch to expand its presence in existing markets across Europe and seize strategic growth opportunities in the US and Brazil. “We have divided our growth strategy into three areas: core, US and Brazil,” said Neves.
In the company’s core market of Europe, the start-up plans to bolster its network of boutiques while developing technology, marketing and operations to better target global demand, while in the US, where Farfetch is much less known, the company plans to open a New York office, complementing the company’s Los Angeles operations, and has recently hired Dara Gary, former sales director at BCBG MaxAzria, to boost its business development team, with the goal of signing up new boutiques and building the Farfetch brand.
Tapping the growing Brazil market is also of particular importance to Farfetch. “Brazil is a unique opportunity for us,” said Neves. “We’ve taken the time to build the foundations in the two years we’ve been present in Brazil with our own local office and team and now we are in a position to become leaders in high-end fashion in that market, which involves adding local Brazilian designers — we have 70 at present — to our unrivalled international range.”
Since launch, Farfetch has attracted over 56,000 customers in 100 countries and recently reported that sales were growing at more than 200 percent per year. “We strongly believe that the model of Farfetch.com is one that will continue to grow, expand globally and attract a very engaged and loyal base of fashion connoisseurs across markets," said Robin Klein, venture partner at Index Ventures who will be joining Farfetch’s board of directors, alongside Frederic Court, general partner at Advent Venture Partners. “Farfetch.com is ideally positioned to create the next global independent franchise in online fashion and luxury,” commented Mr. Court. “Since we backed Farfetch.com two years ago, the company has grown from strength to strength and we are delighted to add some excellent backers alongside us to support the team on this journey.”
But the rise of Farfetch has not been without challenges. Indeed, the company has faced a storm of complaints on blogs and forums relating to fulfilment issues and poor customer service. “We had some customer service issues in our first 18 months,” Neves acknowledged. “But these teething problems were pretty much solved six months ago, with the introduction of some major service upgrades: free returns and collection service, DDP (delivered duty paid) sales to the US and Brazil, a beefed up customer service team and better inventory control systems.”
According to Neves, the company recently ran a survey measuring Farfetch’s net promoter score, a customer loyalty metric defined by the question: “Would you would recommend our company to a friend or colleague?” On a scale from -100 to 100, Farfetch is said to have scored a overwhelmingly positive 72. “We are confident we are now offering an excellent level of service to our customers,” said Neves. “Having said that, we still have a lot to learn and to improve, and we are making that a priority for 2012.”
Vikram Alexei Kansara is Managing Editor of The Business of Fashion