More evidence that VCs are bullish about the online furniture retail space in the UK, as web upstarts continue to apply pressure on the likes of IKEA and other traditional brick ‘n’ mortar furniture retailers.
Existing investors Balderton Capital, Advent Ventures, and Serena Capital also participated, and brings the total invested in the company to around £46 million.
WorldStores says the new capital will be used to support a number of “strategic developments”, namely the creation of an in-house fulfilment fleet to enable “1-hour window next-day delivery” of furniture to more than 90 per cent of the UK population, 7 days a week.
It also plans to invest in the growth (i.e. spend heavy on customer acquisition) for Casafina, the WorldStores-owned flash sales membership-based platform.
In other words, today’s additional capital is all about further positioning the company as an online and scalable alternative to traditional furniture retailers.
The market size is thought to be in excess of £13 billion
In stark contrast, for example, Swedish furniture retailer IKEA has left something of a gap for a dedicated online player to fill. While it does sell some products via its website, its focus remains on getting customers to come to its stores in person, where, presumably, the showroom experience will have them spending more money. This means IKEA’s e-commerce offering is deliberately curtailed, stocking only a limited range of the products that are available in its physical stores.
However, WorldStores isn’t the only upstart to see an online opportunity in the UK furniture retail space. Wedo, backed by MMC Ventures, and Passion Capital, is another new-ish entrant. Meanwhile, Boston, U.S.-headquartered Wayfair also does business in the UK.
And it’s anyone’s guess how long before Rocket Internet’s Home24, which, along with Rocket itself, is backed by Swedish investment group Kinnevik, JP Morgan, and Holtzbrinck Ventures, decides to launch in the UK market. The market size, after all, is thought to be in excess of £13 billion.
To that end, Joe Murray, Co-CEO and Co-Founder of WorldStores, in a statement: “2014 has been another strong year for WorldStores with the company now delivering annual run-rate revenues in excess of £100 Million and shows no sign of abating. We are delighted to welcome Goldman Sachs as new shareholder to the Company and are pleased to have gained the trust of such a formidable investor to support our vision for the Company in this important growth stage”.