Abe's Market Raises $3.4 Million to Target E-Commerce Niche

Investors are betting they’ve found the next Diapers.com, Etsy or ModCloth, but instead of being a niche marketplace for baby products, crafts or independent designers, this one’s focused on natural and organic products.

Accel has led a $3.4 million round of funding in Abe’s Market, with Index Ventures and other angel investors also participating.

The Chicago-based company was founded by Richard Demb and Jon Polin, who wanted to replicate the idea of a farmer’s market online by selling natural and homemade items and letting consumers get to know the merchants.

“The Web is a great place to learn about products. It’s like Whole Foods or Trader Joe’s, but they don’t sell online,” said Demb, who had previously started an all-natural popcorn distribution company.

Abe’s Market, which launched in October 2009, works with about 300 small businesses, ranging from a New Zealand company that sells organic nail polish, to a woman who was previously a private detective and now sells homemade jam, to three skater dudes who make all-natural play dough in a former funeral home.

Demb said in addition to the homemade and organic products, it introduces the merchants through online videos. “We are trying to be as innovative as possible. We want you to be proud to buy our products. Organic nail polish is something I want to tell my friends about. It’s not Revlon.”

Those willing to share their checkout cart with a few of their friends get 10 percent off their whole tab. Sales at the company have been growing 50 percent month over month.

The company, which has seven full-time employees and had raised only $1 million prior to this round, will use the money to expand the number of merchants it can support.

In a release, Accel’s Adam Valkin said, “We have seen tremendous growth in specialty e-commerce. With its fragmented base of passionate sellers and a fast growing population of motivated buyers, we see natural products as a particularly attractive category.”

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