Fab has raised $150 million in new funding, as it looks to fulfill its ambitious mission of becoming the world’s design store. The pre-money valuation for the company in this round is $1 billion.
Investors in this round include new participant Tencent, which is adding a board member to the company, as well as Atomico, Andreessen Horowitz, ITOCHU Technology Ventures, and existing investors. The new funding is just the initial part of the Series D, and the company said that it expects to close further funding as part of this series in the next few months. The company just raised $105 million last July.
With this pivot, Fab isn’t completely changing its product as much as it is changing what the Fab brand means. Instead of selling merchandise from other retailers on its site through flash sales (sales of limited quantities of items for limited time periods), Fab is expanding to include products designed by Fab, products designed by others, and ventures like custom furniture and a brick and mortar store in Europe. The company wants to be one of the “next great iconic shopping brands,” it wrote Tuesday, and that shopping experience will maintain the design focus that the company was founded on.
The company said that its new goals, which incorporate design in everything it does, could help make it the “emotional e-commerce” company, compared to other companies like Amazon. Goldman’s blog post, which will be available on his blog, explained why they need to raise such a large round:
“Differing from the “commodity commerce” players, Fab is the pioneer in Emotional Commerce, helping people discover and buy the meaningful stuff in their lives, like the chairs they sit on, the table they dine at, the plates they eat from, the glasses they drink out of, the pen they write with, the notepad they write in, the art on their walls, the bracelet on their arm – the emotional products in their lives. That’s Fab.
I want to be really clear on this as I’m sure there are skeptics who will ask and wonder why Fab needs so much money. Fab is focused on the long term. We are focused on creating “Wow!” shopping experiences that will result in customers making 20+ purchases from Fab within a couple of years. We are focused on being the global brand that represents emotional commerce for decades to come. Fab is not about a single transaction. Fab is about creating Wow! experiences in everything we do, from the unique merchandise we offer, to the user experience on our website and mobile apps, to fast delivery and a delightful out-of-box experience, to the follow-on customer service. We truly believe that it takes investing in Wow! in order to build the next $10B+ E-commerce company, and that’s what we’re doing.”