BrandsForLess.com Gathers $9M More

Can less be more in the information age?

BrandsForLess.com of Stamford, Conn., hopes so. Rather than overwhelming potential electronic shoppers with volume, the company presents only a select group of suppliers that other shoppers have identified as high-quality service providers to post goods on the site.

Last month, the company raised $9 million in its third round of private equity to support its concept of marketing quality stores. The round was led by a $4 million commitment from George Soros, with the balance coming from a number of other private investors, said George Russell, chief executive of BrandsForLess.

McKinley Capital of New York and Landmark Capital of Greenwich, Conn., placed the offering on behalf of the company. McKinley had placed the company’s first two rounds, while this represented Landmark’s first efforts on behalf of BrandsForLess. To date, the company has raised approximately $14 million in private equity.

The idea for the site came from an evaluation of e-commerce from the vendor’s perspective that Russell said showed an unhealthy environment where retailers could not stand out from one another. The founders decided to create a site where only the best retailers were allowed, rather than basing access on who would pay the highest rent.

“Today, we conduct 400 interviews a day to get a rating of the best retailers in 60 categories,” Russell said. “Then, the winner is contacted by us and rather than bargaining on rent, we charge on the basis of performance.”

The company’s evaluation of consumer experiences also discovered that online shopping offered poor customer service. To counteract that, the company developed technology to make the shopping experience smoother and more convenient for the consumer.

BrandsForLess is profitable, and therefore is considering three options for future financings, Russell said. The options are an initial public offering, a minority strategic investment or a venture round.

“I think that right now we are at a stage where VC’s could be interested,” he said.