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There’s Margin in Meaning: Fab Scores $150m in Funding

Social commerce star “Fab” that pitches itself as “the world’s design store” offering flash-sales on design goods has just closed $150M in initial Series D financing from Tencent, with contributions from existing investors Atomico, Andreessen Horowitz, Itochu Technology Ventures, Menlo Ventures, RTP Capital, Pinnacle Ventures, Lars Hinrichs, and Docomo Capital.

The round is still open and CEO Jason Goldberg expects to raise further funds.  This takes funding to over $310 million since the site’s inception less than two years ago

Rather than pitch itself as an e-commerce site (convenience, value) or social commerce site (personalised recommendations powered by the social graph) to investors, Goldberg is talking up the idea of “emotional commerce – helping people discover and buy the meaningful stuff in their lives.  Stuff that create’s a wow! Exclusive stuff sold only on Fab, and sold in a way that creates a Wow!  The idea is that there is margin in meaning. People will pay more for stuff that they have an emotional attachment to, as opposed to race-to-the-bottom commodity commerce.

Goldberg is onto something; Fab boasts Apple-style margins —43%, up from 29% in 2011.  And with more than 14 million members across 26 countries, Fab sales increased by 500% in 2012.

So expect a slew of “wow-commerce” players to enter to the market (and yes, for budding agencies, the dot com is still available)…

Written by
Dr Paul Marsden
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Digital wellbeing covers the latest scientific research on the impact of digital technology on human wellbeing. Curated by psychologist Dr. Paul Marsden (@marsattacks). Sponsored by WPP agency SYZYGY.