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Also participating in the Series A is an impressive group including Intuit founder Scott Cook; Jeff Wilke, Amazon’s CEO of Worldwide Consumer; Zillow co-founder Spencer Rascoff; RET Ventures; HotelTonight co-founder Jared Simon; Fred Tuomi, the former CEO of Invitation Homes; Scopely co-founder Eytan Elbaz; and a group of current and former Amazon executives via Tapas Capital.
In a phone interview with Fernish co-founders Michael Barlow and Lucas Dickey, I learned more about what the company does, how its business has been impacted by the pandemic, and just what it plans to do with the new capital.
The pair declined to comment on valuation other than noting it was “an up round.”
“We were intentional about the amount raised here as well, and this was the figure we needed to hit the next set of milestones for our business,” they said.
Surge in demand
Fernish is taking a traditionally stodgy concept of furniture rental and attempting to make it cool with its “furniture-as-a-service” concept. The startup has partnered with trendy and high-end retailers such as Crate & Barrel and CB2, in addition to forging partnerships with a number of wholesalers and manufacturers.
“Our concept is to marry the service economy to furniture in the way that companies like DoorDash have done to food delivery or others have for transportation on demand,” Dickey told Crunchbase News. “The emphasis is convenience in people’s lives.”
Before the coronavirus pandemic hit and millions of people were forced to work from home during shelter-in-place orders, Fernish had already experienced some major growth–a topline revenue growth of 10 times year over in 2019 to be exact to “millions in revenue.” It had thousands of subscribers in the two markets in which it operated: Los Angeles and Seattle. It has since expanded into Orange County.
Since the pandemic, demand for certain items has gone through the roof, the founders say.
Specifically, Fernish has seen a 300 percent increase in home office orders since the start of restrictions related to COVID-19, and a 90 percent increase in accessories and decor–rugs, throws, pillows, tabletop accessories and lamps–as customers look to refresh their spaces while staying at home.
How it works
Fernish offers a subscription model, allowing people to rent furniture flexibly from three to 12 months, for example. They have the option at the end of their rental term to either buy it (paying the difference in retail price and what they’ve paid for renting it), return it to the company, or swap it out for something else. It offers three different styles: midcentury/modern, industrial and California chic.
“We price things differently based on how long the term is,” Barlow said. “This practice and our favorable unit economics has put us on a path to profitability.”
I was curious if the company was concerned that this demand would wane when more people end up going back to work in an office. Their short answer: no.
With more people having the option to work from home and/or move to new locales, the company expects demand will continue. It also believes its success doesn’t just hinge on the new work-from-home movement.
“As we move into the back half of 2020, people’s expectations are already radically different than they were at the year’s beginning. The accelerating adoption of e-commerce across all verticals and the acceptance of the service economy is likely to continue. People spending more time in the comfort of their homes is likely to persist–whether that be working, recharging, or entertaining,” Barlow said in a blog post.
Looking ahead, Fernish plans to use its new capital to expand into “multiple” new markets, mainly metropolitan cities it believes more people will be moving to. A year ago, those cities might have been New York and San Francisco. In the future, that’s less certain.
It also plans to nearly double the size of its 40-person team and continue to invest in its “proprietary reverse logistics tech stack.”
The company also has a social good component (which I always love). It’s $5 from every Fernish order placed will go to local charities that offer relief for those most impacted by the COVID-19 pandemic.
Photo caption: Fernish co-founders Lucas Dickey and Michael Barlow. Photo courtesy of Fernish.
Illustration: Li-Anne Dias