There’s certainly no venture crunch in the e-commerce home decor sector.
Home furniture startup One Kings Lane, on track to generate $200 million in revenue this year, has raised $50 million in Series D financing led by Institutional Venture Partners. This follows Fab.com’s $105 million round in July and Wayfair.com’s $36.3 million round announced yesterday.
Also participating in One Kings Lane’s funding were existing investors Kleiner Perkins Caufield & Byers, Greylock Partners, Tiger Global Management, and new investor Scripps Networks Interactive Inc. (NYSE: SNI). IVP is an experienced late-stage investor and Scripps Networks is the “perfect strategic investor” as a broadcast network with HGTV, Food Network and other home and garden shows, says CEO Doug Mack. There are no plans for a One Kings Lane television show, but that would be “intriguing,” Mack says
One Kings Lane expects this to be the last round to get the company to profitability, says Mack. That $200 million in expected 2012 revenue is about double last year’s revenue. The company, which has only been around for about three years, started off not offering many high ticket items. But the company realized that people are willing to buy area rugs, sofas and high end vintage items online and started offering more of them, Mack says. About 10% of all home decor is sold online now, he says.
One Kings Lane focuses on curating top products in each of its categories, which builds trust in the brand, Mack says. The company has hired experts in each category, such as lighting or rugs or even vintage books. OKL doesn’t take inventory itself. Instead it manages the sales, inventory and distribution process. It has built technology that can connect with merchants and manage inventory so that it knows exactly what product is available before it goes on sale. “One thing we have that people don’t get is, at core we’re a technology company,” Mack says. “You talk about Twitter, Yammer and Square (nearbySan Francisco companies). We have to do as much technical innovation as any of those companies.”
One Kings Lane has also built out a vintage section, where third parties that are verified by OKL can sell product. Now about 25% of the products on OKL are third party products–that is, sold not by OKL but direct from third parties. The third party products have enabled OKL to scale much to more products and more different products quicker, Mack says. Overall, OKL adds a mix of new products every day that mixes third party and OKL products. Overall One Kings Lane has kept its focus just on home decor, Mack says. It hasn’t gone more broadly into other categories like competitors.
A major focus lately has been a major spike in mobile usage for OKL. About 25% of its revenues now come from mobile devices. During the Thanksgiving holiday weekend about 42% of traffic came from mobile visits. Tablet visitors tend to be during the evening and purchase higher ticket items, while smartphone use more mirrors desktop usage patterns with higher volumes but lower average order sizes, Mack says.
Hurricane Sandy shut down power at the company’s New York office, where photography, copy writing and other operations are located. But the company has recovreed from that and is above it’s projections for the year, Mack says.
IVP’s Sandy Miller, who invested in Zynga and ngmoco, is leading the investment for IVP.