London-based fashion startup Farfetch has raised $US86 million in a new funding round, the Financial Times reports, valuing the company at $US1 billion.
It’s the third London tech “unicorn” in as many months: Music discovery app Shazam and international money transfer service TransferWise have both also closed funding rounds that value the companies at in excess of $US1 billion in early 2015.
Founded in 2008, Farfetch is an online storefront for more than 300 boutiques across the world. It works with stores in New York, Paris, Bucharest, and Seattle, offering more than 1,000 brands.
Because it doesn’t hold stock itself — products remain at the partner boutiques until purchased online — overheads stay low for Farfetch. It now sees $US300 million in annual sales on its platform, according to the FT. CEO Jose Neves told TechCrunch there are “no plans” to add in-house inventory, and the cash raised will help fund the company’s global expansion.
The low costs of the business may go some way to helping explain the size of its valuation. But even so, it’s remarkably high. Boohoo.com’s market cap peaked at around £800 million when it went public, which would have briefly made it a $US1 billion unicorn. Now Boohoo trades at a market cap of just £272 million. Unicorns remain rare in the fashion industry, Business of Fashion reports:
Asos was never valued at $US1 billion as a private company. Neither was Yoox. And though Net-a-Porter, valued at £350m (about $US531 million) when it was acquired by Richemont in 2010, is worth far more today, there has been no market transaction — a funding round, acquisition or IPO — to validate this.
The funding round is led by DST, a VC firm that has previously invested in Twitter, Facebook, Xiaomi and more. Conde Nast and Vitruvian Partners, both previous investors, have both also returned.