I’m a really big fan of Moxsie.com. The modest Palo Alto startup, backed by $4.7M in venture capital and run by Zappos veteran John Fahner, had one of the most new-age business models that there is in the fashion industry. Moxsie’s original business plan was to be a “virtual showroom” where designers could connect with buyers. But after stifled success, they pivoted and adopted a “Virtual Buyer” model where they engaged a massive social media following in “Buyer Chat” where followers were able to engage in the decision process of what designers and looks were picked to be sold on the site.
Their Twitter feed, managed by Creative Marketing Manager Mayka Mei, was nothing short of genius as far as company accounts are concerned. She relentlessly tweeted about her holidays, her morning regiments, the weather and her feelings all while incorporating Moxsie’s actual business. It was exactly what a company twitter feed should be: personal.
I speak of Moxsie and their twitter feed in past tense because Mei’s amazing tweets ended on January 1st.
Fashion Stake < Moxsie
Without a sound or announcement, everything “Moxsie” on social media went silent on the first day of 2012. Low and behold: Moxsie has been acquired by Fab.com.
Fashion Stake has a unique business model all of its own. Launching as a crowd funding platform for fashion, the site pivoted to become a pre-order service for designers to rake in funds for their new collections. The founders, Vivian Weng and Daniel Gulati, wrote a fascinating series for the Business of Fashion on how they got funding and launched their company (Part 1, Part 2, Part 3, Part 4).
By the time they acquired Moxsie, Fashion Stake had built direct relationships with over 300 independent fashion labels, both in and out of the US. Fashion Stake’s customer base being mostly females between the ages of 24-39, it fit perfectly with Moxsie’s 18-29 year old prime demographic.
The “two companies” planned to remain independently managed.
Fab < Fashion Stake
Although Moxsie was ranked as one of the Internet Retailer’s Top 100 Retailers of 2011 and Fashion Stake had enough traction to be the parent company of the two, they were both blind-sided by the viral business model of Fab.com.
The social flash sales site launched last June and pulled in 1 million users within the first 5 months and 2 million by their 8th month. They have also raised over $51M of venture capital in these short few months. They also “nabbed” former Etsy VP Beth Ferreira to be their COO and launched apps for Android and iOS which won Best Shopping App at the Crunchies this year.
And what happened to Moxsie and Fashion Stake? Late last month, Fab rolled out “Fab Shops” that visually organizes products by categories, as opposed to designer, via dedicated online storefronts.
Where Are They Now?
Caitlina Girald | Moxsie Co-Founder | Caitlina is a marketing consultant at Kiwi Crate, the VP of Business Development and Marketing at The Cools, an advisor at First Growth Venture Network, and is a mentor at The Founder Institute.
Hrishi Kamat | Moxsie Co-Founder | n/a
Mayka Mei | Moxsie Twitter-Handle and Social Strategiest | Mayka went on to become the Senior Strategiest for Red Magnet Media, a social media digital strategy agency with clients from Linkin Park to Duran Duran and Hearst.
Vivian Weng | Fashion Stake Co-Founder | Vivian is now the Fashion Director at Fab.com
Daniel Gulati | Fashion Stake Co-Founder | Daniel wrote a book called “Passion & Purpose.”
What does it mean for FashTech?
Moxsie and Fashion Stake have together raised at least $6-10M in venture capital. Since Fab, the last man standing, only has $50M for their expansion, it is unlikely that the exit/acquisition was a great multiple of the investment. It’s also probably that the acquisition was mostly, if not all, stock transactions.
So is that a bad thing? Not really. Fab is so hot right now that they raised their $40M venture round with nothing but data. Sure, they had to sell EVERY board seat to get it, but Fab is on the fast track to success and has no time for bickering. Nor should they think they will have any challenges since they seem to be doing everything right.
What is interesting about the merger is that Fab didn’t acquire the customer base, the technology, or the team. They bought the two founders, Vivian Weng and Daniel Gulati, and their large database of indie fashion designers.
This really raises a whole new aspect to acquisitions in the Fashtech industry. Whereas technology startups generally get acquired to get patents, IT, and customer bases, fashion companies are getting acquired for their connections in the fashion industry.
And as Fab proves, the pudding is in the technique. Or as Eric Ries says in The Lean Startup, “The big question of our time is not Can it be built? but Should it be built?”
Helium Magazine | Publisher