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Billion Dollar Unicorns: JustFab Getting Ready for an IPO

Posted on Thursday, Mar 26th 2015

The Census Bureau of the Department of Commerce recently reported the fourth quarter retail e-commerce sales for the US. E-commerce sales during the quarter are estimated to have grown 2.3% over the year to $79.6 billion and accounted for 6.7% of total retail sales. For the full year 2014, e-commerce sales increased 15% to $304.9 billion and accounted for 6.5% of retail sales compared to 5.8% in 2013. Billion Dollar Unicorn club member JustFab.com is a fast-growing member among e-tailing vendors.

JustFab’s Offerings

El Segundo-based JustFab was founded in 2010 as an online portal for people to buy shoes. The company set up shop by offering their members the ability to buy a pair of shoes each month for a fixed monthly subscription fee. After realizing the potential of their model, JustFab expanded their operations to other offerings beyond shoes into handbags, jewelry, and apparel.

Today, JustFab is a lifestyle fashion company that offers a personalized shopping experience to more than 35 million members worldwide through their brands including JustFab, FabKids, ShoeDazzle, and Fabletics. FabKids is a children-focused site that offers affordable, yet stylish outfits for children. ShoeDazzle offers their members a daily deal on exclusive ShoeDazzle label and designer-brand styles. Finally, Fabletics was co-founded by Kate Hudson, and focuses on high quality lifestyle activewear and accessories for women.  JustFab believes that they are able to offer their customers a good price on the products by eliminating middlemen and selling through the web directly to the end consumer. They believe that they are “building the next H&M or Zara” through their products.

Besides their product offerings, JustFab has also expanded operations internationally. They are present in the US, Germany, Canada, the United Kingdom, France, and Spain.

JustFab offers an engaging and personalized experience for their members. At the time of signing up, they ask the member to complete a style profile that helps JustFab offer targeted products to the members. On the first day of every month, JustFab then creates a personalized boutique for their members. Members can then decide to buy or not buy by the fifth day of the month. In case a member decides to opt out before the fifth, JustFab refunds them their month’s membership fee.

JustFab’s Financials

JustFab operates on a subscription-based commerce model. They charge their customers a monthly membership fee that grants members access to curated products offered by their website. Membership is available at a monthly price of $39.95 and comes with features such as free shipping and free returns. They do not disclose their financials, but were estimated to be operating at a revenue rate of $400 million for 2014 and growing to $500 million for 2015. JustFab’s US operations have been profitable for 2014.

They are venture funded so far with $249 million in funding from investors including Technology Crossover Ventures, Matrix Partners, Shining Capital, Passport Capital, Rho Ventures, and Intelligent Beauty. Their last round of funding was held in August 2014 when they raised $85 million at a valuation of $1 billion. Analysts speculate that JustFab may be gearing up for an IPO soon.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

This segment is a part in the series : Billion Dollar Unicorns


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. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 1)
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. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 2)
. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 3)
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