Investors include twofour54, Middle East Venture Partners (MEVP), Dubai Silicon Oasis Authority, and MENA Venture Investments (MVI)
The Luxury Closet, the fast growing online marketplace that buys, sells, and consigns personal luxury goods, mostly pre-owned and at a discounted price, announced today that it has secured a $2.2 million in its “series A” financing round, that will help the start-up scale its operations, continuing its astounding growth in the luxury e-commerce sector.
The latest round of funding, which represents a significant deal made entirely via regional venture capital funding, is a co-investment led by the region’s leading Venture Capital firms including: Middle East Partners (MEVP) – already a seed stage investor in “The Luxury Closet”, Dubai Silicon Oasis Authority (DSOA), (the regulatory body of Dubai Silicon Oasis (DSO), the integrated free zone technology park), twofour54 part of the Media Zone Authority Abu Dhabi) and MENA Venture Investments (MVI).
The Middle East is a leading market for the luxury industry, with the highest per capita spending on luxury goods estimated at approximately $1,900 per year, and a total value of $7.7 billion (Bain&Co report, 2013), expected to reach $15 billion whilst Dubai, a bona fide luxury hub, readies to host World Expo 2020. At the same time, e-commerce sales in the region have increased dramatically in the last three years and are projected to reach $15 billion by the end of 2015.
“There’s a huge appetite for luxury in the Middle East. We found a gap in the market for a large-scale online luxury offering, centred on the most coveted, authentic, pre-owned personal luxury products. The Luxury Closet filled that gap, creating a market place in the Middle East where the savvy and mobile consumers can buy and sell authentic luxury products via a convenient, safe and valuable service”, explained Kunal Kapoor, Founder of The Luxury Closet.
“This is an exciting and decisive time for the luxury industry and e-commerce in the Middle East market, with so many transformative changes underway,” began Walid Hanna, Managing Partner, MEVP. “As the first institutional investor in The Luxury Closet, back in 2012, we believed a pre-owned online luxury business had potential, and, today, we remain committed to helping the start-up become the dominant player in this market,” concluded Hanna.
Dr Mohammed Alzarooni, Vice Chairman and Chief Executive Officer, Dubai Silicon Oasis Authority, said: “DSO is committed to supporting tech entrepreneurs and start-ups, particularly initiatives that focus on mobile e-commerce, apps, or internet technology. As demonstrated by its remarkable growth to date, The Luxury Closet has the potential to serve as a truly global online marketplace for luxury and fashion products in the Middle East. We are glad that our investment will help accelerate the start-up’s pace of development and innovation.”
Noura Al Kaabi, Chief Executive Officer, twofour54 said: “At twofour54 we are committed to creating and developing a thriving entrepreneurship culture. We do this by supporting the most dynamic and innovative of entrepreneurs and start-ups as they build industry-changing companies. It is vital that we support these companies, which are shaping the future of the e-commerce and mobile marketplace enabling us to build a self-sustaining media and entertainment industry.”
To date, The Luxury Closet has acquired hundreds of thousands of members; has well over half a million of monthly visitors from some 50 countries; and has had 3-digit growth in revenue year over year, since its launch.
“We were very impressed with Kunal and his core team behind The Luxury Closet: the offering they built in such a short time, the traction they got with their customers, their industry knowledge, and, especially, the vision behind the company,” remarked Fares Ghandour, Investment Manager of angel-fund MVI. “It’s clear that Kunal discovered that rare white space – the last luxury frontier – and found the way to start up a pretty terrific business which we’re excited to help expand to its full potential,” added Ghandour.
Building on its momentum, The Luxury Closet will use the $2.2 million financing to continue to scale up its operations, accelerate product development and innovation, expand its global reach, and invest in strategic sales and marketing resources – all of which underpins its planned growth strategy to become the region’s premier online market place for pre-owned luxury by the end of the decade.