Fab has come a long way since its original debut back in 2010 as Fabulis.com, a gay social network. The company evolved from a social meet up place into a flash-sales pipeline, and has since morphed into an entity offering its own products with plans to soon open a physical design store of its own. Based in New York City, the company has successfully expanded into Europe, with about 40 percent of its sales stemming from the region, serving 27 countries.
Now, Fab has raised an impressive $150 million at a $1 billion valuation to fuel its expansion. Not yet in Asia, Fab plans to soon extend into China and other parts of Asia through the strategic advice of Tencent, which will be taking a seat on the company’s board and overseeing its entrance.
”It’s a way to enter markets through strategic partners who can help mitigate risk and will increase the likelihood of success,” Fab’s CEO Jason Goldberg told Forbes.
Nearly 65 percent of China’s ecommerce market are 18 to 35 years old, the majority of which are women, which suits Fab’s audience.
Goldberg hopes to take Fab to the heights of the world’s top ecommerce giants such as Amazon, Alibaba, eBay and Rakuten with a $10 billion valuation.
Though the company has achieved a tenth of its dreams, it still has a long way to go. The company has about 14 million registered users who have bought 6 million products. Sales quintupled in 2012, and are expected to double this year. Gross margins have grown from 29 percent in 2011 to 43 percent today. Not yet profitable, Fab is on track to be in the black by 2015. The company’s US division could be profitable now if it weren’t for reinvestment. The company targeted sales between $200 million and $300 million this year, about double the size of last year’s value.
Though the company has already raised $310 million in previous investment, this latest $150 million infusion won’t be the last time Fab passes around the proverbial venture hat. The company plans to raise an additional $50 million to $100 million in the last few months.
Goldberg reiterated that the company raised such a sizable round not because it is in a bubble, but because in preparation for the future.
“I want to be really clear on this as I’m sure there are skeptics who will ask and wonder why Fab needs so much money,” Goldberg explained on the company’s blog. “Fab is focused on the long term. We are focused on creating ‘Wow!’ shopping experiences that will result in customers making 20+ purchases from Fab within a couple of years.”