OpenSky Raises $30 Million for Twitter-Inspired Shopping Site
The founder and CEO of OpenSky, John Caplan, says the curated shopping site has more in common with Twitter than with eBay or Amazon.
On the site, shoppers add — or “follow” — celebrities and experts who share similar interests, to receive recommendations on the latest food, fashion, design and style.
In that way, OpenSky pushes product ideas to shoppers, somewhat in the way Twitter lets people discover information versus having to search for an answer on Google.
Caplan told me OpenSky has raised $30 million in fresh capital to continue building out the business.
The New York-based company, with offices in Los Angeles and Nashville, is only six months old and previously raised $19 million in two prior rounds.
New investor Providence Equity Partners led the financing. Existing investors Highland Capital Partners, Canaan Partners and the Raine Group also participated.
Some of the company’s talent includes celebrity chefs such as Bobby Flay and Italian food expert Lidia Bastianich, and pop culture figures like actress and reality TV star Kristin Cavallari, who will advise customers on the latest fashions.
In a recent offering, Flay, who has 164,626 followers, advised shoppers to purchase a spice bundle for $23. Fitness guru and motivation speaker Gabrielle Bernstein recommended a collapsible Hula-Hoop that’s easy to travel with.
Caplan said it’s an approach that’s really resonating with shoppers, particularly women in their 30s.
He said the company will break $1 million in sales this month and is on track for a $10 million run rate. Both order volume and revenues are growing 50 percent month over month.
The company already has 600,000 members signed up; they are now connecting to millions of shopping “experts.” It took the first 14 weeks for OpenSky to hit one million connections, 10 weeks to get its second million and three weeks to reach its third million. Customers are spending $50 on the average transaction, which is more than double Amazon’s average order of $22, Caplan said.
“This feels like such a modern way to shop, compared to the search box,” Caplan said. “There’s not a lot of soul in online shopping. We are putting the soul back into shopping.”
He added that walking into actual stores is engaging and entertaining. “I think Amazon is a fantastic company, and they have a lot of things they do really brilliantly, but I don’t think it’s the best way to shop.”
Many companies right now are challenging the original e-commerce model, and for good reason. Kleiner Perkins partner Mary Meeker noted in a report last week that e-commerce makes up 8 percent of overall commerce in the U.S. today, and continues to climb.
Caplan said the capital will be used to add more shopping verticals and experts to the site. Today, it has 75, with hundreds more coming.
As the former president of About.com, which relied on a distributed workforce to contribute answers to the site, Caplan believes he knows exactly how to get the business to click.
To make money, OpenSky is splitting the gross profit from the items sold with the experts on the site. It’s free to join as a member, and there’s a 90-day money-back guarantee. So far, it has experienced a 1 percent return rate.
“I personally love businesses where you partner with talent and create talent,” he said.