If it wasn’t already exceedingly clear, fashion ecommerce is a booming, highly competitive market—and one which requires a tremendous amount of capital to succeed.
Today, Farfetch, a rapidly growing luxury ecommerce retailer, is announcing its latest round of investment: US $86 million, in a transaction that values the company at US $1 billion. With this investment, Farfetch joins the fabled “Unicorn Club,” a name specifically ascribed to startups that cross the billion-dollar valuation threshold (a list which continues to grow at a surprising pace). This round of investment, led by Moscow-based investment company DST Global, also included participation from previous investors Condé Nast International and Vitruvian Partners.
With the new funds, Farfetch plans to continue its aggressive international expansion by launching local language sites, including German, Korean, and Spanish; opening new global offices in key markets; and growing its portfolio of boutiques, which now exceeds 300 around the world. The funds will also be used to fend off competitors including Net-a-Porter (owned by Richemont Group), Mytheresa.com (now owned by the Neiman-Marcus Group), MatchesFashion.com, LuisaViaRoma, Shopbop.com (owned by Amazon, Inc.), and others.
Closer to home, Farfetch has also set its sights on further expansion within the Middle East. In January, Style.com/Arabia and Farfetch hosted a secret dinner in Abu Dhabi to fete the addition of prominent Kuwaiti boutiques AlOthman and Al Ostoura to the retailer’s platform, with more boutiques planned for the future.
Speaking to Style.com/Arabia about the investment, Farfetch’s Founder and CEO, José Neves, commented: “We are thrilled with the news. The investment will be used to focus on our international expansion and the Middle East is a key market for us. We will focus on signing more boutiques in the region and exploring partnership opportunities, too.”
Farfetch’s last round of investment, US $66 million announced in May of last year, was led by Vitruvian Partners, with participation from Condé Nast International, Advent Ventures, and Richard Chen of Beijing-based Ceyuan Ventures.
Founded in 2005 by Russian investor Yuri Milner, DST Global is known for its successful late-stage investments in digital companies including Facebook, Groupon, Twitter, Airbnb, Spotify, and Zynga, to name a few. And with Farfetch, Milner just might have another major success on his hands.
—Shashi Menon
