Kim Kardashian's ShoeDazzle Walks Away With $40 Million from Andreessen Horowitz

ShoeDazzle, a two-year-old company building a subscription-based e-commerce business, has raised $40 million in capital.

The round was led by Andreessen Horowitz, which contributed $30 million. Other participants included existing investors Polaris Venture Partners and LightSpeed Venture Partners.

John O’Farrell, general partner at Andreessen Horowitz will join the board.

The Santa Monica, Calif.-based company sends members a monthly selection of shoes, handbags and jewelry based on their preferences. They can choose to buy one item every month for $39.95, or they can skip a month. The packages are sent in the mail in a pretty box tied up with a ribbon. If subscribers don’t do anything, and forget to pick an item or opt out, they will be charged and have $39.95 in credit.

So far, the service has attracted three million subscribers.

The company was founded by Brian Lee, along with fashion celebrity Kim Kardashian. To date, the company has raised $60 million in capital.

Lee said the cash will be used for launching new product categories and expanding into international markets. In a couple of months, it will launch in the U.K., and then Asia and South America. Today, it operates in the U.S. and Canada. Lee also expects to grow the size of the company from its current base of 135 employees.

A “tiny” amount of the round was used to cash out the stock of the founders, Lee said. Lee previously co-founded LegalZoom.com.

O’Farrell said that they’ve been looking to invest in a new e-commerce company for awhile, and that ShoeDazzle stood out from the pack. “It has a strong financial model and delights customers with fashionable products.” And, he notes, it’s a business that can make significant profit.

ShoeDazzle’s business model is a little different and is a bit similar to the old CD clubs, where members would get a new album in the mail every month based on a particular genre. However, subscribers can easily skip a month if they don’t like any of the products. It also has strong ties to Facebook, where it has nearly a million fans.

The entire product line is branded “ShoeDazzle,” and is sourced by the company directly. That’s one of the aspects that O’Farrell really liked. “One of the key things in e-commerce is inventory management and the supply chain. ShoeDazzle is able to have really high quality products at acceptable prices and still get margins,” he said.

Already, there are companies following in ShoeDazzle’s footsteps. In March, Nordstrom-owned HauteLook launched Sole Society, a monthly shoe club.


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