Investors are betting that consumer desire for discounted goods isn’t going anywhere and are backing online boutique marketplace Jane with $40 million in new capital.
The Utah-based company, founded in 2011, will use the Series A round to expand into new categories, like men’s and off-price luxury, as well as get into the Canadian market, according to chief executive officer Taleeb Noormohamed. With about 1.5 million active users and 3,000 sellers on the marketplace, mainly small independent boutiques, Noormohamed sees Jane as the palace for sellers who either aren’t big enough to be on Amazon, or don’t want to be, but also may be too big to make sense selling on Etsy.
“I’m not comfortable putting actual numbers to this, but I think the category expansion will represent a significant new bump and luxury will again,” Noormohamed said. “We have pretty aggressive growth plans.”
The company is expecting to tally about $250 million in sales this year with plans to increase 20 to 30 percent next year, roughly the same rate of growth it saw in 2020.
This is Jane’s first round of funding for the company, which is profitable, and it’s one of the first things Noormohamed did when he took on the ceo role at Jane this past summer. He previously worked as an executive at Farfetch. The round is led by Tritium Partners, a private equity fund based in Austin, Tex. Among its past investments is coupon website RetailMeNot and furniture and home decor marketplace Chairish.
“We see significant potential for Jane in a market where consumers are rallying behind small businesses and looking for more personalized experiences,” Matt Bowman, Tritium’s managing partner, said.
But the site is also surely luring shoppers because of its generally low price point, ranging from about $10 to $30, on apparel and certain other goods being sold by an array of about 3,000 third-party sellers. Noormohamed noted that Jane has seen bumps in popularity this year in regions and states where it has not done as well in the past, like more urban areas of California, New York City and Philadelphia. It’s traditionally been popular in the South and Midwest, he said. Given the state of the economy and unemployment expected to end the year at at least 12 percent, it’s little wonder that more people are looking for discounts and less expensive goods. The average basket size at Jane is around $30.
“As the economy starts to stabilize, I don’t think the desire for a good price will go away, partly because I think it’ll take a long time for the economy to recover,” Noormohamed said.
He added that there is “a lot to learn from the Farfetch model.”
Part of the funding will be used on efforts to keep new customers Jane has pulled in during the pandemic. A more aesthetic look for the website, new marketing and investment in technology that will surface goods based on a shopper’s locale are all on the way, too. The company even has its first fashion director to help out with looks and selections. When off-price luxury hits the website, expected in the second half of 2021, Noormohammed expects to see average basket size in that category hit $250 to $300, although the typical Jane shopper is only likely to spend that on occasion, maybe once a year.
“We do want to respect the intent of making sure [the Jane shopper] has access to what she wants a good price,” Noormohammed said.
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