Who says the Internet is dead?
Our crack investigative reporting team has learned that Gilt Groupe, a New York-based private-sale ecommerce company, has signed a term sheet with General Atlantic and Matrix to raise about $40 million at about a $400 million valuation.
Gilt was founded two years ago. It generated $25 million of revenue last year and should generate about $150 million of revenue this year. It is also projecting revenue of more than $500 million next year. So that explains why brand name VCs like Matrix and GA continue to throw money at it.
And here’s another amazing Gilt detail: The US business isn’t hemorraging cash! In fact, it started generating cash three months ago. (Japan, on the other hand…)
Gilt now has about 200 employees–180 here and 20 in Japan. The company will be hiring another 100 employees over the next six months.
(That’s proud Gilt CEO Susan Lyne above. We’d be smiling, too.)
It’s also worth noting that Gilt is operating in a pretty sweet little corner of the ecommerce industry. The company that inspired Gilt’s founding, Vente Privee in France, will do $750 million in revenue this year. Smaller competitors such as hautelook (just raised $10m from Insight) and Ruleala are doing well, and there are rumours of others entering the industry like HSN. Neiman Marcus has started doing private sales, and the model is also apparently working well in Brazil, Russia, Europe, and elsewhere.
So that’s some good news, no?
Disclosure: The co-founder of Gilt Groupe, Kevin Ryan, is also a co-founder of SAI. In fact, Kevin co-founded SAI a few minutes before he co-founded Gilt Groupe–which has rendered the relatively slow-growing SAI the equivalent of a cement business in his mind. Gilt now occupies two floors of a huge NY office building, including the closet that SAI used to occupy. Gilt has hundreds of employees. Gilt is now worth several hundred times as much as SAI. Etc…
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