One Kings Lane, the online home-furnishings retailer, has grown explosively over the past two years—and investors just spent another $50 million on it, bringing its total raised to $117 million.
IVP led the round with Scripps Interactive, the operator of HGTV and other home-related cable networks and websites, also joining as a new investor. Current investors Kleiner Perkins, Greylock Partners, and Tiger Global Management also invested in the round. (Disclosure: IVP is an investor in Business Insider.)
The company hasn’t disclosed its valuation, but CEO Doug Mack tells us it’s up from One Kings Lane’s last round in 2011, which reportedly valued the company at $440 million. The new investors are getting board observer status, not full board seats, which suggests their $50 million is buying a relatively small chunk of the company.
“We can run the company forever on this money,” said Mack—a coded way of saying the company can hit positive cash flow with the sums it’s raised. (Some of the money from the last round is still in the bank, Mack says.)
One Kings Lane expects to do more than $200 million in sales this year. It has six million members, or registered customers, and Compete.com reports it had 2.4 million visitors in October.
How is One Kings Lane succeeding when there’s been such a dearth of e-commerce innovation over the past decade?
One key reason is that Amazon’s strategy—a search-driven catalogue of everything you could possibly buy—falls on its face in the home category, which demands a more thoughtfully selected collection of goods. Mack, an Internet veteran, once ran a business that developed 3D software for placing furniture in virtual houses, so he gets the importance of presentation.
Consumers have changed, too, with widespread adoption of wireless broadband and tablets changing how they shop. More than 50% of One Kings Lane’s traffic on Thanksgiving Day came from mobile, and instead of seeing an e-commerce slowdown during that week, when people are traditionally away from the office computers where they used to do most of their online shopping, Mack says sales were strong and heavily weighted towards mobile.
One Kings Lane regularly does about 25% of its sales on mobile devices now.
And marketing has changed, too. The rise of social networks, along with an intensively data-driven, scientific approach to marketing practiced by veterans of eBay, Zappos, and other companies who have joined One Kings Lane, means that customer acquisition is far more efficient than it used to be.
“A lot of people have come in and said, ‘Facebook advertising doesn’t work,'” Mack says. “We say, ‘You’re not doing it right.'”
One Kings Lane is also applying those techniques to the TV ads it’s been running, and Mack says the company can carefully track its return on investment there—a big change from the dotcom era when free-spending e-commerce companies like Pets.com gave TV advertising a bad name.
It all adds up to a new kind of e-commerce company—one that’s getting a very different reception from investors.
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