UPDATED 11:18 EDT / SEPTEMBER 22 2011

NEWS

Just Fabulous Raises $33 Million for First Round to Build on Subscription Model

El Segundo, California-based JustFabulous announced $33 million in series A round of funding led by Matrix Partners, and in participation of Technology Crossover Ventures. The capital will be used to create more categories of its e-commerce subscription model, as well as to expand internationally.

This isn’t the first time we’ve heard of subscription model as a product distribution approach. Back in the 80s, CD clubs automatically sent members a CD a month (unless notified earlier not to) and charged them for it. The more people forget to bow out, the more money the clubs get.

In this day and age, however, it’s easier to review products and bail out for a particular month through the Internet. JustFabulous offers branded shoes, handbags, and jewelry every month. Though the manufacturing is in Vietnam or China, the stylists are still among those from company’s catalogue and the recommendations are based on a user’s preset preferences.

Adam Goldenberg, JustFabulous co-CEO coined the term “flexible subscription” for the company’s marketing strategy. Members are given 5 days to decide whether to buy any item for $39.99. Should the member decide not to, his/her account will be credited with the same amount which is redeemable anytime. Members can also choose to quit anytime.

Josh Hannah of Matrix Partners now joins the JustFabulous board. He pointed out that unlike most e-commerce sites today, much of the experiences in physical retail shopping is retained in its online environment.

“The first generation of e-commerce shopping was great for commodity goods, like digital cameras or books. But it didn’t work well for fashion,” Hannah said. “Part of the fun in shopping for fashion is the enjoyment and that sense of discovery. On Amazon or Zappos, it’s brutal to browse.”

JustFabulous has been doing great since its launch 18 months ago. It currently has 130 employees and 2.5 million members who are generating them $3 million in monthly revenue. All in all, the company has garnered $66 million in funding.

Flash sale websites sure are gaining a lot of attention from investors and are subsequently able to spur innovative changes. Last June, Estonian start-up Fitsme.com launched Fitbot, a female mannequin that adjusts itself according to the measurement of the buyer to fit dresses on her behalf. This will boost women’s confidence in online shopping. Another flash sale site, Fab.com, competes directly with physical pop-up shops. In just 12 weeks, it has demonstrated impressive statistics with 2.5 million members and 80,ooo orders as of August, and it has as much as 500 design partners. We also have One Kings Lane, a home décor website raising $40 million in a round led by Tiger Global.


A message from John Furrier, co-founder of SiliconANGLE:

Your vote of support is important to us and it helps us keep the content FREE.

One click below supports our mission to provide free, deep, and relevant content.  

Join our community on YouTube

Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.

“TheCUBE is an important partner to the industry. You guys really are a part of our events and we really appreciate you coming and I know people appreciate the content you create as well” – Andy Jassy

THANK YOU