Jamel Toppin for Forbes
Luxury online fashion retailer Moda Operandi has raised $165 million in growth capital as it increases its footprint in sought-after Middle Eastern and Asian markets and develops new technology to woo wealthy, mobile-savvy young women to its site.
The round was co-led by Adrian Cheng, scion of the third-richest family in Hong Kong, and Apax Digital, a new billion-dollar fund investing in high-growth internet companies advised by private equity giants Apax Partners.
This brings Moda’s fundraising total to just over $300 million in seven years. Existing investors include New Enterprise Associates, LVMH and Fidelity, among others.
Company CEO Deborah Nicodemus described this new injection of capital as strategic. Cheng, especially, will be able to open doors for Moda as it makes inroads in markets like China, Hong Kong and Korea.
“I didn’t go into the market with the idea to fundraise,” she said. “We have enough capital to take us to profitability. We now need to fuel growth acceleration.”
Moda will open new showrooms across the Middle East and Asia, as well as in Vancouver, Paris and Geneva. It currently operates two of these private, luxurious spaces for women to try on high-end designer apparel with the help of stylists: one in London’s exclusive Belgravia and another on New York’s Madison Avenue.
The e-tailer differentiates itself from high-end competitors including Net-A-Porter and Matches Fashion by offering designers’ entire Fashion Week collections rather than putting shoppers at the mercy of department store buyers.
Moda’s customer — under 40, on average, so younger than the typical Bergdorf Goodman acolyte — can preorder a head-to-toe look directly off the runway via the startup’s app about an hour after a show ends.
The company’s rarefied clientele sets it apart in the world of e-commerce, where the average online shopping order is $84. Moda’s is closer to $1300, although that figure is larger by orders of magnitude during the various Fashion Weeks. In 2017, Moda will do $165 million in revenues, Nicodemus said. That’s up from $68 million in 2015.
As well as growing internationally and investing in technology, Moda is adding categories to its retail offering. The company is expanding its shoes, handbags and accessories inventory and selling homewares for the first time.
“When a client comes to Moda and they’re buying home, they’re buying the full tabletop — flatware, stemware, art objects,” Nicodemus said, adding that the average shopper seeking out plates and the like spends between $50,000 and $120,000. (The record for most expensive item ever purchased? $520,000 for a diamond necklace, to a Middle Eastern customer.)
Moda Operandi was founded in 2010 by former Vogue market editor Lauren Santo Domingo and Icelandic entrepreneur Aslaug Magnusdottir.
Magnusdottir bowed out in 2013, to be replaced by Nicodemus, a branding and merchandising expert who had spent 16 years at French luxury conglomerate LVMH. Santo Domingo remains cofounder as well as muse: the entire site’s aesthetic mirrors her own. At 41, the stylish, wealthy, tech-savvy mom and Fashion Week front row fixture epitomizes Moda’s target client.
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