A group of top Silicon Valley investors and experienced tech managers are behind more money Fernish, a Los Angeles-based startup that wants to reinvent how people buy furniture for their homes.
Khosla Ventures led a $ 15 million Series A round on Tuesday, involving Techstars Investments, Tapas Capital, RET Ventures, and individuals like HotelTonight's co-founder, Jared Simon, Zillow's co-founder, Spencer Rascoff, who former Invitation Homes CEO Fred Tuomi attended. and member of the Applied Semantics founding team, Eytan Elbaz. Jeff Wilke, CEO of Amazon Worldwide Consumer, who invested in a $ 30 million round two years ago, invested more money, as did Scott Cook, co-founder of Intuit.
The all-star cast of investors – Khosla was an early supporter of Square, DoorDash and others – is betting that more people will use the Fernish model to furnish their homes. The company is aimed at young customers who want high-quality furniture, but need to replace it frequently because they are often on the move at the beginning of their careers.
Fernish customers pay a monthly fee that varies based on subscription duration and items. You can select multiple parts as part of a package created by an interior designer, or you can choose individual elements.
Accent chairs cost between $ 19 and $ 46 a month. Sofas cost just $ 26 a month and $ 63. The furniture is in mint or new condition and comes from suppliers such as Crate & Barrel, CB2 and Floyd.
If customers want to buy the pieces, they have this option when the subscription period has expired. Subscription payments count towards the sale price, or customers can exchange the furniture for other parts as soon as their contract expires. There is a monthly minimum of $ 99 and subscriptions last three to 12 months.
Fernish was founded in 2017 and is still unprofitable, but has increased sales more than tenfold in the past year. Fernish co-founder Lucas Dickey said the company's valuation has increased since its last funding.
Fernish continues to add customers despite the ongoing pandemic. The company has seen a 300% increase in home office orders since the COVID-19 outbreak began, as employees wanted to fill their workspaces at home while many brick-and-mortar stores were temporarily closed or ran out of business.
The e-commerce giant Wayfair, a leading online furniture store, also saw growth in orders delivered in the first quarter increased by 21% compared to the previous year and sales by almost 20%.
Fernish responded to the health crisis by enforcing strict safety guidelines and thoroughly cleaning its furniture, vehicles, and warehouses. The company offered a non-contact delivery option and asked its employees to wear PPE equipment when entering a customer's home. The company also donates $ 5 per order to local charities for relief efforts related to COVID-19.
Raising capital amid a global pandemic is testament to the company's progress to date and the growth potential of its co-founders Lucas Dickey and Michael Barlow said in an interview with GeekWire.
"We take away all of the vulnerabilities associated with buying, owning, moving, selling, storing, and ultimately disposing of furniture and replacing it with an extremely convenient, service-oriented solution," said Barlow.
Fernish will use the new funds to expand beyond Los Angeles and Seattle and hire more employees. It hasn't fired any workers in the past few months, unlike hundreds of other tech startups. The money will also help the company build its in-house technology platform, which "Furniture Tetris Plays," as Barlow described.
Barlow estimates the US furniture market at over $ 100 billion. Wayfair, Williams-Sonoma, Walmart and others are vying for part of the online furniture industry. This is a unique category because the supply of furniture is complex compared to other goods sold on the Internet. Amazon also sells furniture and has released various online tools that buyers can use to buy sofas and other furniture.
Speaking of Amazon – the company's DNA is deeply rooted at Fernish. Dickey worked for the giant in Seattle for almost four years. Here he originally met Wilke, a top Amazon manager who learned about Fernish through Fernish Kristin Smith, a former colleague of Dickey who invested in the startup before becoming its chief operating officer last year.
Barlow and Dickey met at Atom Tickets, a Los Angeles startup founded by a former Amazonian.
It's no wonder that Amazon's leadership principles (prejudice to action, disagreement and commitment, etc.) and business strategies (writing "future" press releases to plan major product launches) are closely followed at Fernish.
"We have this day 1 mentality," said Dickey. "As much as you think we would celebrate this Serie A increase, we hardly stopped to see the money. In our eyes, it's day one again."