Streetwear marketplace TheDrop on Monday revealed its Series A close of $4.6 million with participants Continental Investment Partners, Rimrock Venture Partners and previous angel and seed investors.
Founded in 2017, TheDrop offers brands like Stüssy, Pleasures and Clearweather, among others. The company plans to use the new funding toward launching new content and brand storytelling strategies, as well as real-time website personalization.
The Series A closed in August and increases the total funding raised to $8.5 million.
TheDrop chief executive officer Matt Falcinelli said the funding will help accelerate long-term plans for the business. Personalization was a focus for the company before the site was launched — “Personalization done right can see a 70 percent increase in conversion,” Falcinelli said — and they brought sneaker designer and personality Jeff Staple on as an adviser in August 2020 in hopes of ramping up their content.
He explained that a good story results in a 30 percent increase in conversion and TheDrop was initially “reliant on brands to provide content.”
“We knew there would be a point where we would need to create content,” Falcinelli said. “We’re at a point in time where we’re going to start shooting content and have a roadmap to how we get there.”
Last year, TheDrop broke even a year before its plan and also during the early months of lockdown in the U.S. Falcinelli said that first quarter this year for the company was as big as the fourth quarter, which is the opposite of traditional sales expectations.
“There was a hangover in the second quarter and the third quarter was the break even with the second quarter and now we’re seeing a big fourth quarter,” he said.
In addition to content and personalization, TheDrop aims to expand globally, beginning with the U.K. in January and soft launches in the European Union countries and Australia. With this expansion, TheDrop will bring hundreds of brands to global markets and also tell stories for brands not based in the U.S. that aim to expand in those markets.
“As a marketplace without inventory risk, we can put more emphasis on young brands with a story to tell and develop it continually as a point of discovery,” he said. “For instance, here’s a hot brand from Berlin or from Sydney. Excited to turn that corner.”