Posted on Monday, Dec 7th 2015
According to a Grand View Research report, the global market for eyewear is expected to reach $142.18 billion by 2020 from $90 billion in 2013. The North American eyewear market, which was valued at $35 billion in 2013, is projected to reach $47 billion in 2020. Market research company IBISWorld estimates the US market for online sales of eyeglasses and contact lenses to be worth $344 million. Online eyewear retailer Warby Parker has joined the Billion Dollar Unicorn Club riding on the success of its niche e-commerce business.
Warby Parker’s Offerings
New York-based Warby Parker was founded in 2010 by Dave Gilboa, Neil Blumenthal, Jeff Raider, and Andy Hunt to sell affordable eyewear. It sells designer eyeglasses online for under $100 with a ‘one for one’ offer. It saves costs by designing frames in house, by avoiding licensing fees and store expenses, and by working directly with suppliers and shipping products directly to consumers with valid prescriptions. Its low prices give it an advantage in an industry dominated by Luxottica Group, which owns the Oakley and Ray-Ban brands as well as the LensCrafters, Pearle Vision, and Sunglass Hut retail chains.
Today, Warby Parker has a thriving business and in 2013 started its brick-and-mortar storefronts in trendy neighbourhoods to build awareness of its brand. It now has 20 stores in 16 US cities, employing about half of its 500 employees.
Apart from low costs, another differentiating factor is the use of technology to streamline customer experience. Warby Parker uses a point-of-sale system that stores all of a customer’s interactions with the company, including phone calls, emails, prescription information or products viewed. This fully integrated database is available to all retail advisors, whether in store or on the phone, creating a seamless customer experience. It also has a popular service called Home Try-On in which customers can test up to five frames at home free of charge.
Warby Parker’s Financials
Warby Parker has sold over one million pairs and given away one million pairs since 2010. The company is not yet profitable and doesn’t disclose its revenue details.
Warby Parker is venture funded and it has raised a total of $218 million from investors including American Express, Spark Capital, BoxGroup, Brand Foundry Ventures, First Round Capital, General Catalyst Partners, Lerer Hippeau Ventures, Menlo Ventures, Microsoft, Red Swan Ventures, SV Angel, Thrive Capital, Tiger Global Management, T. Rowe Price (New Horizon Fund), and Wellington Management. Its latest round of funding was held in April 2015 when it raised $100 million at a valuation of $1.2 billion. An earlier round in December 2013 had valued them at $500 million.
Warby Parker plans to use the funds to expand to 20 physical stores by 2015 and in building new technology to make shopping for frames in stores and online easier. It is also working on enabling customers to conduct eye exams using just their mobile phones.
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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