Modcloth, an innovative online retailer, has secured $19.8 million in Series B financing led by Accel Partners. Prior investors, First Round Capital and Floodgate, also participated. News of the financing was reported by peHUB in May.
ModCloth, an innovative online retailer specializing in fashion and decor from independent designers, has secured $19.8 million in a round of Series B financing. The funding will be used to capitalize on the explosive growth of the indie fashion e-retailer, which became profitable in 2009 after four back-to-back years of roughly 600% annual growth. This round is led by Accel Partners, which also includes Facebook, Etsy and Groupon in their portfolio. ModCloth’s previous investors, First Round Capital and Floodgate, are also participating. Theresia Gouw Ranzetta joins Josh Kopelman of First Round Capital and Mike Maples of Floodgate, alongside husband-and-wife co-founders Eric Koger and Susan Gregg Koger, on ModCloth’s board.
ModCloth will use the capital to further develop its own social commerce platform built in Ruby on Rails. A full scale build-out of the product management and digital experience teams is already underway in San Francisco, where a new headquarters was opened in May. There are also plans to launch a new supply chain operation in Los Angeles within the next several months. The original Pittsburgh office will continue to serve as the hub for customer support and distribution, along with other core functions.
“We want to fundamentally change the fashion industry,” says co-founder Susan Gregg Koger. “For so long, creating fashion has been this top-down process where the few ‘insiders’ at the top get to say what’s cool. We’ve already started to change that through programs like Be the Buyer™, which empowers customers to vote samples from indie designers into production. But that’s just the beginning; our list of to-dos is a mile long.”
ModCloth was started by Eric and Susan, when they were just teenagers, during the summer before entering Carnegie Mellon University in 2002. Eric applied his tech experience and business acumen to help transform Susan’s creativity and love of “thrifting” into an online business. After graduating from college in 2006, Susan and Eric decided to expand, offering vintage-inspired clothing from talented indie designers from all over the world. The company has gained attention for its unique dedication to customer engagement on the site, as well as for being a vanguard in the social media sphere. Site features such as Be the Buyer™ have inspired a fun and unique social shopping community that empowers both independent designers and customers.
“ModCloth is helping to change the way people shop in the same way that Facebook changed the way we communicate. In a very short period of time and with little outside capital, the company has leveraged the social web to empower a wildly loyal and engaged customer base,” said Theresia Gouw Ranzetta of Accel. “Under the leadership of Susan and Eric, we expect ModCloth to continue its customer-focused innovation and phenomenal growth,” added Ryan Sweeney, who is also part of the Accel team backing ModCloth.
Long-term, the funding will enable ModCloth, now with a team of over 150, to continue to blur the lines between consumers, designers, producers, and e-retailer.