Q&A: CEO of London fashion retailer farfetch.com, which just raised $18m

Jose Neves’ farfetch.com is enjoying turnover of $60m after launching just three years ago

Jose Neves, founder of London-based online fashion retailer farfetch.com, has a lot to be happy about.

His company, the fastest-growing worldwide curated marketplace for independent fashion boutiques, has just raised $18m in a further expansion round of funding from Index Ventures, eVenture Capital Partners and existing investors Advent Venture Partners.

The annual sales growth rate of farfetch.com currently stands at 204 per cent. It has more than 56,000 customers in 100 countries. Its annual turnover is $60m. And it only launched just over three years ago.

The site brings together the collections of more than 100 of Europe and North America’s most influential designer boutiques as well as smaller boutiques in over 200 locations, and in 12 different countries.

With his finger well and truly on the global fashion pulse, Neves plans to use the investment to expand into new markets in the US, Brazil and Asia. A new office will be opened in New York to complement their office in LA.

Given that 50 per cent of the sales are delivered to emerging and new markets, this global expansion makes sense.

I caught up with Neves to find out a little bit more about farfetch.com.

So Jose, congratulations on securing $18m! Tell me a little bit about how farfetch.com came about.

“We launched back in 2008 when it became clear to me that online channels were to become a major part of fashion retail.

“I had started working in the fashion industry back in 1995 and had a successful company called Six, a clothing distribution company. I noticed that many independent retailers didn’t have the resources to create an online presence, but there was - and still is - a huge demand for variety on the internet.

“Before I got into fashion I had started a software company, so you could say that I brought together my two biggest passions: technology and fashion.

“Now we work with so many amazing brands from very well established names, brands with strong backgrounds (we work with one boutique called Ivo Milan that was established in 1894!)”

What was it like starting out?

“I started by building a network of boutiques and brands. There were really no competitors at the time.

“There were online market places like ebay but they weren’t curated and had no restriction on entries – on the other side there were consumer market places like ASOS.com but they didn’t cover the high end of the market.

“The initial funding was all my own money. I had some cash from my other company so as they say in poker – I went “all in!”

“The company started to grow at a huge rate and so we brought our first investor in back in April 2010. Advent Venture Partners put $6m in to the business at that stage.”

How did you achieve the latest round of funding - and how difficult was it?

“We have been in talks with investors for a while and we’ve had a lot of interested companies. There has been a huge amount of interest around this business model. I think people are aware of how this industry is growing.

“It is still a small percentage of fashion sales being conducted online compared with other industries. Investors have been hunting around and digging for the next ground-breaking idea in the high end of fashion. We were obviously picked up by research teams, and the calls started rolling in!”

How did you know it was time to expand the business?

“It was pretty obvious, as I started with such a small team, and the project was an immediate hit with consumers. We knew we had to take on more people and find more retailers to work with. We couldn’t have gotten it off the ground without substantial investment.

“One of the partners at Advent Venture Partners, Frederic Court, is a very skilled investor with a technology background who understands fashion as well. This is very rare so we knew we had found the right partner to get the initial investment.

“This round has been led by Index Ventures and eVentures Capital, and Advent are still involved in this round too.”

How does your business differ from your competitors like, say, Net-A-Porter.com?

“We are very different. Only five per cent of our products overlap. We do stock a lot of the same brands but we stock a much greater variety and often go for different products.

“We also work with up-and-coming designers which are too small for sites like Net-A-Porter, because we deal with boutiques, we have access to them.

“Net-A-Porter has around 15,000 products online. We have about 35,000 and we buy in a very different way. Net-A-Porter acts as a magazine with a singular editorial voice. We act more like a community with many buyers, all with different viewpoints.

“We try to give all of these contributors a voice through our editorial and really expose the global community in which we work.”

Why was London the perfect place for farfetch.com to start?

“It is the perfect habitat for start-ups. If you look at the big successes such as Net-A-Porter and ASOS, they are British. I think there are three reasons for this…

“London is the fashion capital of the world, it is also the epicentre of venture capital. Add to that the ecosystem of internet start-ups, and you find it’s the perfect combination. If you go to Silicon Valley you’ll find plenty of tech but no fashion.”

How will you be marking London Fashion Week when it starts on 17 February?

“We always put together a big review of the fashion week from our in-house team, but we also have the contributions and thoughts of all of our boutiques and subsequent legion of fashion buyers. In a sense, we have a scout in every showroom – no stone is left unturned!

“No other company has a network quite like it!”

So it seems! I know where I’ll be going for Fashion Week content. (After visiting LondonlovesBusiness.com of course!)

Social Bookmarks