JustFabulous Secures $33 Million to Make Subscriptions Fashionable Again

JustFabulous has raised $33 million in a first round of capital to build out its subscription e-commerce business, which is an old trend that’s coming back into vogue like a pair of skinny jeans with ankle zippers.

The round was lead by Matrix Partners, with Technology Crossover Ventures also participating.

The El Segundo, Calif., company is doing something similar to CD clubs in the ’80s, where members would be automatically charged and get a new disc every month, unless they opted out in advance.

The companies largely profited when people forgot to opt out.

The business model is making a bit of a comeback, except that with the Internet it is much easier to review the products in advance and decide whether or not to buy — which is why it’s making a good fit for fashion.

Other sites that are focused around the same concept have popped up, including ShoeDazzle, which is focused on shoes and has raised $40 million from Andreessen Horowitz and others; and Trunk Club, a personal shopping assistant for men that recently secured $11 million.

JustFabulous co-CEO Adam Goldenberg (pictured below left) calls the company’s model a “flexible subscription,” where members get the first five days of the month to decide whether to buy any item for $39.95. If they decide not to buy, they will credited for that amount, which can be redeemed at any time. Shoppers can quit after any length of time.

Subscribers will receive a variety of JustFabulous-branded shoes, handbags and jewelry to pick from every month. The items are tailored based on a user’s taste and personal style. Most items are manufactured in China or Vietnam, but are created by a stylist panel at the company.

To help with that, Kimora Lee Simmons — a former model known for her creative talents at the girls clothing line Baby Phat — will join as president and creative director. Simmons (pictured above right), who was previously married to Russell Simmons, also participated in the round as an investor.

(On a side note, celebrity Kim Kardashian is a co-founder of ShoeDazzle.)

Matrix Partners general partner Josh Hannah, who is joining the board, said JustFabulous is creating an experience much like a physical retail shopping environment. That’s different from most other e-commerce sites today.

“The first generation of e-commerce shopping was great for commodity goods, like digital cameras or books. But it didn’t work well for fashion,” Hannah said. “Part of the fun in shopping for fashion is the enjoyment and that sense of discovery. On Amazon or Zappos, it’s brutal to browse.”

JustFabulous has already being doing, well, fabulously.

Since launching 18 months ago, it has hired 130 employees, signed up 2.5 million members and is doing $3 million in revenues a month (up from $500,000 in January). The capital will be used to continue that growth, including expanding into new product categories, like jewelry, in October, and into new international markets.

In total, the company has raised $62 million.

The first investment came from Intelligent Beauty, an incubator in Los Angeles that was started by JustFab founders Goldenberg and Don Ressler. The incubator is also responsible for two other major companies, including DermStore, a health and beauty e-commerce destination; and Sensa, a weight loss program. Including JustFabulous, the three companies combined have annual revenues of $250 million.


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— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google