High end fashion has been increasing its presence on the online space over the years. Farfetch, a London based seven year old startup, is an online marketplace that retails high end fashion. It has reached a major milestone by achieving a valuation of $1 billion. It recently raised a funding of $86 million that confirmed its enhanced valuation. Farfetch has evolved into a platform that brings together over 300 independent boutiques across the world. The company has so far raised a total of $195 million in funding and has become a robust platform for selling designer clothes and accessories. Farfetch is the third high-profile London tech startup this year to achieve the billion dollar or more valuation.
The latest round of funding will help Farfetch expand its services to new international markets. The company announced its plans to enter Germany, South Korea, Spain and entire Latin America. Currently, the bulk of the sale for the online retailer comes from UK and US markets. Russia, China and Japan are emerging markets for them where their services were launched just last year. Vanity Fair publisher Condé Nast and private equity firm Vitruvian Partners who had invested in the startup in the beginning also participated in this round along with DST Global headed by Yuri Milner who has a track record of investing in tech giants like Facebook, Twitter and Alibaba.
Milner believes that luxury fashion e-commerce has the potential to grow fast and Farfetch has the right team to capitalize on that opportunity. In terms of valuation it has already moved ahead of other notable online fashion companies like Yoox, Asos and Net-a-Porter. The online retailer has created the model that allows it to keep the overheads low. It registered an impressive $300 million in sales last year but it does not hold any inventory of its own. It simply provides the stores an online marketing platform and coordinates shipping prices and payments. CEO and Founder Jose Neves is confident about the future as the company has developed a cachet of designers that gives them an edge over the competitors in the field.