San Francisco startup Stitch Fix has closed on $12 million in a new funding round led by Benchmark as it looks to scale its tech-powered personal shopping and delivery service for women.
The funding, which is Stitch Fix’s Series B, brings the total amount invested in Stitch Fix to nearly $16.75 million.
Of course, the old stereotype is that women love to shop. But the truth is that with so many apparel and accessory options out there, sometimes it can be pretty darn nice to have someone else do the shopping for you. That’s why personal stylists at the luxury level can fetch such high fees. The idea behind Stitch Fix is that it can deliver a comparable experience at a more accessible level, and on a wider scale, thanks to — you guessed it — technology.
As I’ve written before, Stitch Fix operates like a clothing version of Pandora, the personalized radio app, in that it’s meant to get better the longer you use it. Through Stitch Fix’s website, new users provide basic information such as their body shape, size, personal tastes, and budget. Then, a human Stitch Fix stylist uses that data to select and ship a box of five items for the user to try on. The user keeps and pays for only the things she likes, and sends back the ones she doesn’t. Stitch Fix charges a $20 per box styling fee, which goes toward any purchase that the user ends up making. The company keeps track of what each user keeps and sends back to further personalize her profile.
According to founder and CEO Katrina Lake, who as you can see in the video embedded above stopped by TechCrunch HQ this week to talk about the new raise, Stitch Fix has seen some pretty incredible growth in recent months. Its customer base and revenue has grown 500 percent since its $4.75 million Series A funding back in February 2013 (at that time the company had more than 10,000 clients, so today it has at least 50,000), and its staff has grown from 50 employees to nearly 200. So far, Lake says, all that growth has been organic — and the new funding is primarily to help keep up.
“We have been very pleasantly surprised with how much women are loving the service, and how much they’re continuing to tell their friends, and how many bloggers are talking about the service as well. So really for us, raising being able to raise capital is part of being able to meet that demand and really foster that community of women we have talking about Stitch Fix… the organic growth that we’ve seen has far exceeded what we dreamed it would be.”
It’s not just money that Stitch Fix is taking on to help go to the next level. Today also brings news of some heavyweight human resources additions too. Benchmark partner Bill Gurley is joining Stitch Fix’s board of directors, as is former Gap executive Marka Hansen and former Walmart.com CEO John Fleming. Stitch Fix has also brought on three new hires at the executive level: former Nike exec Lisa Bougie is joining as chief merchandising officer, former Crate & Barrell CMO as chief marketing officer, and former Stella & Dot exec Meredith Dunn as VP of styling.
The idea is that these people can bring a mix of both old school retail experience and technology know-how to bring Stitch Fix to the next level by keeping its current customers happy and deepening its customer base in the United States even further. The growth Stitch Fix has seen thus far shows that it’s really on to something — now, the challenge is to make sure it can be the go-to service in a space that’s bound to attract more competition.
