When Ben Lerer shopped Thrillist for its latest round of funding, he sold it as a media company with a media valuation, not an e-commerce company, a category that typically garners lower valuations. Even still, since acquiring Jack Threads, the commerce business’s revenues has completely dwarfed Thrillist’s.
The company has grown to profitability with 100 percent year-over-year growth and $60 million annual revenue, having taken only $1.8 million in venture backing. That funding came in 2005 from Pilot Group, Clear Channel CEO Bob Pittman’s investment arm. The company had to stay extremely focused in order to get to this point, Lerer says.
“The reason we raised so little was because we didn’t know how to raise any money, and we didn’t know what the fuck we were doing. We had a small vision which was to build a Daily Candy for dudes,” he said.
Seven years later, that vision has grown. Now he wants to build a modern-day Conde Nast, where overlapping diagrams of users consume both content and goods. To do that, the company raised $13 million from media expansion grandfather Fred Harman at Oak Investment Partners, who backed two of the biggest media exits of the last five years, Huffington Post and Bleacher Report.
He raised the money, namely, for security: “It’s a little irresponsible to have a company with 200 people and $8 million in receivables and swings in income with only $1.8 million in the bank,” he said.
It’s also for flexibility: He has also started creating in-house brands for JackThreads, based on the site’s purchase behavior data. In order to do that, he needs to spend money on inventory. “When we see something working, we want to be able to move on it,” he says.
Here’s Lerer on Thrillist’s first round of funding in 2005: