* Investment values Zulily at $1 billion
* VC firm Andreessen Horowitz leads the funding round
* Cash will allow business to "stay aggressive"
SAN FRANCISCO, Nov 15 Flash-sales site Zulily
raised $85 million in a funding round that values the company at
$1 billion, showing that investors still have cash for some
styles of e-commerce.
The cash infusion comes as shares in the daily-deals site
Groupon, once viewed as a company that could transform
the way consumers buy bargains online, continue to implode.
Groupon is trading around $3, compared to its initial public
offering price of $20 a year ago.
Seattle-based Zulily's valuation is on par with the $1
billion valuation investors assigned Gilt Groupe, another flash
sales site, in May last year. The funding round comes a little
more than a year after Zulily last raised cash, $43 million at
around a $750 million valuation.
"The capital allows us to continue to stay aggressive with
the business," said Chief Executive Darrell Cavens. "We want to
continue to grow and add people to the team who can think big."
Zulily's list of potential customers who receive its daily
emails recently topped 10 million members, he said, double the
number a year ago. Monthly visitors to its site number 3.2
million, according to comScore, compared to 1.2 million at Gilt
and 825,000 for One Kings Lane, another flash-sales company.
Flash-sales websites offer steeply discounted products for a
limited time. Gilt, which started in 2007, was the first flash
sales business to launch in the United States. Others include
Rue La La, HauteLook, owned by Nordstrom Inc (JWN.N) and Ideeli.
Amazon.com Inc has its own flash-sales site called
These businesses grew rapidly in the wake of the 2008
recession as more shoppers looked for discounts and a slew of
unsold inventory became available from luxury apparel brands.
Growth has slowed since then, partly because brands cut back on
production, reducing excess inventory. That forced some flash
sales sites to evolve their business models and expand into
other categories in search of growth.
Gilt Groupe is trying to prepare itself for a possible
initial public offering in 2013 and has shut some businesses and
put others up for sale. [ID: nL1E8KKLZE
Zulily, which launched two years ago, focuses on mothers and
sells everything from baby products to home-decor merchandise.
It expanded to Britain last year.
Its latest funding round was led by venture-capital firm
Andreessen Horowitz, which invests in e-commerce sites Fab and
In a blog post, Andreessen partner Jeff Jordan wrote that he
was impressed by Zulily's rapid growth, ambition and strategy.
"One reality in e-commerce today is that you want to avoid
trying to compete directly with Amazon," Jordan wrote
in a blog post. "Like Fab, Zulily does this by aggregating a
long tail of talented designers who typically lack extensive