FabFitFun started out as a digital publication in 2010. Three years later it evolved into a subscription box company in a gamble that has apparently paid off.
Last year, the Los Angeles-based startup said it had reached, and surpassed, $200 million in revenue and hit a one-million-member milestone. It has grown from 220 employees in the first quarter of last year to about 400 currently. And today, FabFitFun announced it has raised $80 million in Series A funding led by Kleiner Perkins. Existing backers NEA and Upfront Ventures also participated in the round. Previously, the company had raised $3.5 million in 2015.
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In a statement, FabFitFun said the new capital will go toward expanding its product offerings and “fueling” its continued global expansion. It also plans to keep hiring: the company has about 50 open positions posted on its site at the moment. As part of the financing, Kleiner Perkins General Partners Mood Rowghani and Mary Meeker will join as a board member and board observer, respectively.
“FabFitFun has emerged into an exciting and entirely new distribution channel that brings retail to the platforms where consumers are most engaged,” Rowghani said in a statement. “The company’s personalized connection with its community allows brands to better understand and interact with consumers – establishing a long-term relationship rather than simply a transaction.”
Growth
I talked with Daniel Broukhim, co-founder and co-CEO, last March and he gave me some background on the company and detailed its mission. The way it works is that members get a seasonal box four times a year with items valued at more than $200, according to the company. Customers pay $49 a quarter (or $180 a year) and also get access to specialized original online content and member-only exclusive sales.
The company works to find the “best new” beauty, wellness, fashion, and fitness products and include full-size versions of them in their boxes. An example of items found in a given box includes candles, an eye mask, earrings or a bracelet (customers can sometimes choose what they prefer), and a massage roller.
To customize the products, FabFitFun conducts onboarding surveys for each customer and is starting to use a combination of machine learning and data science to pick out products. It also gives members the element of choice in some cases.
“We aim to be someone’s best friend curating their entire lifestyle,” Broukhim said.
“It’s this really deep focus on the notion of membership that has driven things for us,” he added, with a comparison to Netflix’s model. “As we continue to add more things that benefit our members and also focus on customization and personalization, we find that customers love what we do and stick around for longer.”
Illustration: Li-Anne Dias
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