Beyond the Rack, the online flash sale leader in Canada, has closed on a new $36 million investment round led by Silicon Valley-based Panorama Capital.
This story first appeared in the November 9, 2011 issue of WWD. Subscribe Today.
Other investors in the current round include Export Development Canada, Tandem Expansion Fund, Rho Canada and Inovia Capital. Existing investors from an earlier round, Highland Capital Partners and BDC Venture Capital also were participants.
The e-commerce site so far has raised $53 million in total. This is the firm’s third round of fund-raising. The current round is the second one with institutional investors. The first institutional round was in the summer of 2010, and before that was a seed round.
Yona Shtern, founder and chief executive officer of Beyond the Rack, said, the company is “cash flow positive.” He emphasized the round was needed to expand the firm in three areas: automation and technology, acceleration of marketing and acquisitions.
The firm ships 8,000 packages a day now, and expects to ramp up to 16,000 packages a day next year, according to Shtern. “That requires a fairly sizeable investment in logistics to scale the back end,” the ceo said.
As for acquisitions, he said the firm has already acquired three competitor sites. One was Top Button, acquired November 2010, which operated out of New York. The other two he declined to disclose since they were private placements. Shtern isn’t just looking at other flash sale sites as acquisition targets. “We service 12 different merchandise categories. We’re not in the travel space. There are quite a few other e-commerce models [we’re thinking about], whether [we] get there organically or buy our way in,” Shtern said.
Beyond the Rack targets the demographic that typically shops at TJ Maxx.
“In targeting a much broader segment of consumers, we see an opportunity to build a very substantial company and are delighted to join forces to further expand its thriving business,” said Shahan Soghikian, managing director at Panorama. Soghikian will join Beyond the Rack’s board.