Interior Define gets another $15 million – Consumer News

on Mar11

9 March 2018 | 10:00 am

Interior Define, an omnichannel customizable furniture maker, has raised another $15 million as it attempts to become what founder Rob Royer describes as “the first online-built, iconic furniture brand in the U.S.”

The Series B round was led by Chicago’s Pritzker Group Venture Capital and Fifth Wall Ventures, a Los Angeles-based firm focused on real estate and retail technology. The money will be invested in physical stores (called “guide shops”), technology and growing headcount. The infusion brings Interior Define’s total investment capital to $25 million.

“We closed a round of capital a year ago and didn’t have plans to raise again soon, but we opened three new guide shops in 2017 and they went really well,” said Royer, a former marketing executive who launched Interior Define in 2014. “We believe we’re seeing the results of that strategy both in terms of physical and online sales.”

While e-commerce startups with a physical retail component are generally considered risky investments, Pritzker Vice President Sonia Nagar says Interior Define’s business model has allowed it to sidestep the clunky, capital-intensive stereotype.

“They do all built-to-order sofas, so they have a super-light supply chain and positive working capital,” she says. “When you don’t have heavy inventory, you’re able to be more nimble and responsive to customer demand.”

Nagar says her firm, which also participated in last year’s Series A round, was impressed enough to lead the Series B. After serving as a board observer last year, she’s officially joined Interior Define’s board.

“You sometimes expect entrepreneurs to miss their numbers, but since we’ve invested in the last round, Rob has met or exceeded his plan on almost every single metric,” she says. “His actions speak louder than words.” The company tripled its revenue in 2017 for the third consecutive year, according to Royer.

Since launching its first physical store on Armitage Avenue in Lincoln Park in 2015, Interior Define has opened stores in New York, Los Angeles and Austin. It will open a San Francisco location in June that will also feature products from complementary omnichannel lifestyle brands, Royer said.

For shoppers far away from those locations, Interior Define also debuted an augmented reality app today that lets customers visualize its sofas and chairs in their homes, as well as test out any of 75 fabrics and leathers. Likewise, a new “comfort guide” on its site, filled with video, photos and 3D modeling, is intended to help web shoppers select the best cushion option.

In addition to being customer-friendly, these virtual tools will help Interior Define’s bottom line, Nagar says, because they’ll cut down on customer returns.

The company will continue to look for bricks-and-mortar space, and will also launch a new home category by summer, Royer said. “Whenever we add a new category, it has to be differentiated by customization,” he said. “We launched fully upholstered customizable bed frames last year. This category will be similar but for a different room.”

While Royer acknowledges that competition in the world of vertically integrated, omnichannel furniture has increased, he says the focus on customization will continue to set Interior Define apart. He also has the advantage of being one of the first brands to enter the spaceā€”and he’s learned from the best. Royer’s wife is Monica Royer, founder of fellow omnichannel retailer Monica & Andy, and his brother-in-law is Andy Dunn, co-founder and CEO of Bonobos, which pioneered the “guide shop” model of augmenting e-commerce with a few highly styled physical showrooms.

Chicago’s cadre of venture-backed retail startups also includes Luxury Garage Sale, a designer consignment business that’s nabbed $6.5 million; Mac & Mia, a children’s line that’s raised $3 million; Monica & Andy, which has raised more than $2 million; and Brideside, a bridesmaid dress business that has collected $1.5 million.



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