NEW YORK, United States — 'Pre-tail' fashion start-up Moda Operandi, which enables women to pre-order designer pieces straight off the runway via limited-time online trunk sales, announced today that it has raised $36 million in a Series C round of funding led by RRE Ventures, with the participation of existing investors New Enterprise Associates, New Atlantic Ventures and Condé Nast, as well as strategic investors IMG and LVMH.
The company, founded in 2010 by former Gilt Groupe executive Áslaug Magnúsdóttir and American Vogue contributing editor Lauren Santo Domingo, plans to use the new funding to grow the business globally. "We will focus on building the international business in markets where we have seen strong initial traction and where online luxury is expected to grow rapidly over the next few years. These include the Middle East, Brazil and parts of Asia,” Magnúsdóttir told BoF.
But critically, the company also plans to expand the business beyond 'pre-commerce' alone. Starting in November, Moda Operandi, which carries luxury brands like Marc Jacobs, Proenza Schouler and Isabel Marant, will also begin selling a curated selection of in-season merchandise for more immediate delivery.
For Moda Operandi — whose digital trunk show model offers customers early access to covetable runway looks, but requires upfront payment for items that are delivered anywhere from six weeks to five months later — the move represents an opportunity to target a far broader consumer base who may be uncomfortable paying so far in advance or are seeking more immediate satisfaction. But it also signals a shift in the company’s underlying business model.
Indeed, until now, Moda Operandi was able to avoid the financial risk associated with taking on inventory, something that is set to change as the company tests a more traditional e-commerce model, in addition to the 'pre-commerce' approach it has taken thus far. “The trunk show model is still core to our business. Additionally, we will take inventory of merchandise to be featured in our seasonal offering,” said Magnúsdóttir. It's a smart way of leveraging the more than 100,000 members the start-up has attracted, building on the buzz from its original consumer proposition.
Most interestingly, the company plans to leverage the sales data it collects from its 'pre-tail' business to inform its traditional retail buys, mitigating inventory risk by injecting an element of science into buying decisions that have traditionally been driven more by intuition than hard data. “Our buy will primarily be focused on the best selling runway styles from our trunk shows mixed with a curated selection of commercial pieces,” revealed Magnúsdóttir.
Will a model that couples 'pre-commerce' with e-commerce enable Moda Operandi to challenge established competitors like Net-a-Porter? Only time will tell.