A company taking the interior design industry into the online era, Laurel & Wolf, has now raised $4.4 million in Series A funding for its web-based platform that connects professional designers with customers, allowing them to create personalized designs for both residential and commercial spaces. Though only live since late spring 2014, Laurel & Wolf has already served thousands of customers who pay a small, flat fee for access to high-quality design services from the company’s hundreds of design partners.
The new funding was led by Charles River Ventures; Laurel & Wolf has raised $5.5 million in total, which also includes investment from Karlin Ventures, Upside Partnership and Draper & Associates.
The idea for Laurel & Wolf came from Leura Fine, a long-time professional designer based in L.A. She saw there was a dramatic shift taking place around design, thanks to the inspirational boards and images being shared on sites like Pinterest and Instagram, alongside the growth and popularity of a number of e-commerce sites that allow shoppers to acquire great design at affordable prices.
But what hadn’t changed was the interior design industry itself.
The designers she knew were still often struggling to make payroll and find work, while their potential customers worried either about the cost of design services, if money was a factor, or feared things like who to hire and trust, if finances were not an issue.
“Ninety-eight percent of people couldn’t afford [interior design services] because of the way it’s been traditionally priced. Or if they could afford it, they were terrified of it,” Fine explains. “There were all these issues around the way it works, because it’s been a very opaque business. So, this is something that really evolved out of me seeing a need in my own industry,” she says.
With Laurel & Wolf, the process for getting design help is simplified. Customers pay a flat fee of $299, and in return receive around a half-dozen digital style boards from professional designers who create personalized looks for your home or office. These boards are based on information you provide the service in advance, which includes taking a style quiz, sharing photos of your space, and marking items you want to keep in your final design.
After looking through the 2D digital style boards from designers, customers select their favorite and then work with that designer directly to make modifications. Using online tools, you can comment and annotate the design, providing feedback about what you liked and didn’t, or asking about different color options, and so on.
The end result is a shopping list that helps you make your home look like the one in the picture, and it sticks to whatever budget you had in mind, too. That means you can stretch your budget further than buying a package room deal at a local retailer, because you can mix-and-match items from different stores to get the best deal.
“We’re definitely servicing real people,” says Fine, who notes that the average single-room budget is around $5,500. However, she adds, they’re also working with more expensive designs, too, including those from Airbnb owners looking to upgrade their space so they can charge more per night, as well as larger, 7,000-8,000 square-foot homes, and even 10,000 square-foot-plus startup offices, for example.
Laurel & Wolf generates revenue by keeping 20 percent of the flat design fee, and through affiliate revenue on online sales – most customers buy off their list from e-commerce retailers, not local stores. This summer, the company also plans to roll out a program that will leverage its growing footprint to source discounts on products it sells, and then give designers a portion of those sales.
Also in the works is a plan to introduce its own financing options through an integration with a third-party credit provider, upgrades to its online design tool to make it more interactive, and the launch of a native, mobile application.
The opportunity for the startup goes hand-in-hand with e-commerce’s overall growth, too, it seems. Laurel & Wolf already has a deal in the works with at least one online store to be listed on its website as the recommended design service provider.
Now a team of 20 in L.A., which includes co-founder Brandon Kleinman, Laurel & Wolf has serviced thousands of customers and has a team of 650 designers who have worked with the company’s clientele across the U.S. and Canada.