Luxury fashion house Groupe Arnault and group of venture capitalists plug $40m into Hoxton-based fashion platform
Bernaud Arnault, the billionaire owner of luxury fashion house LVMH, has become an investor in Lyst, one of London’s newest online fashion retailers, after taking part in a $40m (£26m) financing round.
The latest fundraising comes on the heels of online fashion rival *Farfetch, which raised $86m last month in a deal that valued it at more than $1bn
Lyst's founder Chris Morton, who started the business in 2011, refused to comment on its valuation saying he took the decision early on that it would be “unhealthy for my team to obess over".
As well as Group Arnault, Lyst has also received further backing from previous backers Accel, tech firm 14w, Skype backers DFJ and Mr Morton’s previous employer Balderton Capital.
Mr Morton said that he was introduced to Bernard Arnault and his family by a mutual friend when financing talks started araound eight weeks ago.
Lyst, which moved into the former *White Cube modern art gallery in Shoreditch in 2013*, is already partnered with 11,000 designers and has attracted shopppers from 154 different countries.
The company's model works by partnering directly with thousands of fashion brands such as Michael Kors, Tory Burch and Oscar de la Renta and using computer algorithms to improve customer serviceby updating shopers when a favourite brand has a new collection or items available, wherever they are in the world.
Lyst then facilitates the purchase through the fashion brand’s own payment system and allows the brand to make the deliveries, meaning that unlike rivals Asos or Net-a-Porter, it doesn’t hold any inventory.
“I don’t want people to think of us as a retailer, we are positioned as an online version of a shopping mall, or Bond Street, where people can visit and find their favourite brands all in one place”, Mr Morton said.
The entrepreneur said that he wasn’t phased by market scepticism around middle-man technology companies like his, and pointed to the likes of Netflix and skyscanner who have both focused on improving customer experiences.
“This is an exciting time in our space and we are very proud to be at the centre of it. Our model has grown exponentially in the USA and UK, and this round of funding allows us to take Lyst to fashion consumers around the world.
Mr Morton started the business after several years at Balderton Capital, which provided financing to Italian fashion group Yoox. Last month LVMH’s rival luxury house and Cartier jewellery owner, Richemont, agreed a deal to merge its Net-a-Porter business with Italian e-commerce group Yoox
“We are excited to be investing in Lyst’s latest $40m funding round. We’ve known the business since its inception and participated in previous rounds", Suranga Chandratillake, general partner at Balderton Capital, said. "Their insight-driven platform provides each customer with a unique shopping experience and, by doing so, they have cracked one of the most difficult challenges in e-commerce. That's why they are stealing a march on the incumbents", he added.
By Ashley Armstrong, M&A Reporter