Kleiner Perkins invests $30 million in online retailer Untuckit
today Jun 5, 2017
Untuckit, a retailer focused on men's casual shirts that are designed to be worn untucked, said on Sunday that venture capital firm Kleiner Perkins Caufield & Byers had invested $30 million in the company's first major round of fundraising.
The funding will help Untuckit open 15 new U.S. stores and expand into women's and children's apparel. Founded in New York in 2011 as an internet retailer, it started opening physical stores in 2015 as part of a "clicks-to-bricks" strategy.
Untuckit did not disclose the implied valuation that Kleiner Perkins's investment inferred on the company, but a source said on condition of anonymity that the transaction values Untuckit at more than $200 million.
Like some of its competitors, Untuckit is blurring the lines between online and physical stores. Several e-commerce companies that have built a growing customer base have started to turn to retail outlets to market their products. Untuckit now has eight brick-and-mortar stores.
"We always knew we would have a physical presence since a large percent of male consumers still are uncomfortable shopping for a new brand digitally," chief executive Aaron Sanandres said in an interview. Mood Rowghani, a Kleiner Perkins general partner, said in a statement that Untuckit having both a digital and physical presence has "profound benefits to merchandising, design, marketing, and customer happiness.”
Bonobos, another men's retailer which sources have said is in talks to be acquired by Wal-Mart Inc, runs "guideshops" that allow customers to try on clothes before having them shipped to their home. Eyewear company Warby Parker and clothing rental service Rent the Runway have made similar moves.
But running retail outlets has its challenges, including managing inventory, human resources and marketing strategies. Online retailer NastyGal shuttered its physical stores as part of its bankruptcy process earlier this year.
Sanandres said Untuckit is looking to open 100 stores over the next five years, and is in discussions with mall developers Simon Property Group Inc, Macerich Co and Taubman Centers Inc about these plans.
Untuckit was founded by Sanandres and Chris Riccobono, two students who met at Columbia business school. The company had previously raised $200,000 from friends and family.
Its first marketing dollars were invested in radio and magazine advertisements, as it sought to establish its brand. While its signature product is untucked shirts, it has since branched out into T-shirts, jackets and shorts.
Its founders say Untuckit is profitable with sales more than doubling every year.
PricewaterhouseCoopers advised Untuckit.
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