Online retailer Fab raises $105 million in private funding

Reuters News
Posted: Jul 18, 2012 9:57 PM
Online retailer Fab raises $105 million in private funding

SAN FRANCISCO (Reuters) - Online retailer Fab secured $105 million in financing, showing that investors are still willing to back Internet retailers that are both fast-growing and revenue-generating. The funding valued Fab at $600 million, a source familiar with the situation said.

The latest financing round was led by Atomico, the investment fund founded by Skype co-founder Niklas Zennstrom. Atomico was joined by Pinnacle Ventures, ru-Net Technology Partners, Mayfield Fund, and DoCoMo Capital. Several existing investors, including Andreessen Horowitz and Menlo Ventures, participated. The company previously raised $40 million in December 2011.

Atomico "has a ton of global experience," said Fab CEO Jason Goldberg in an interview. "They've had the experience of building a global brand, a global service."

That experience should help Fab as it expands into new markets such as Brazil, India, Japan and Turkey, all tentatively on the drawing board for 2013, Goldberg said. Fab now sells in 20 countries.

Fab, which until a revamp last year was a gay social network, now has some 5 million members, up from 200,000 a year ago. Its members buy 3.4 products per minute and the company should rack up an estimated $150 million in revenue this year and triple that next year, Fab said.

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The financing will also help Fab speed up its shipping times and expand the number of products on the site beyond the 10,000 it currently offers, Goldberg said.

(Reporting By Sarah McBride; Editing by Matt Driskill)