TouchOfModern raises $14M to prove that the era of men's commerce has finally arrived
Popular wisdom states that women make better target consumers than men. And for this reason, the bulk of ecommerce innovation – including categories like fashion, home goods, and travel – has targeted the female demo. But tables are turning.
Not only is online spending by males growing at double the rate of females, but given the lack of recent attention, the men’s market represents a far less competitive environment on a per user and per dollar basis. Given this trend, it’s not all that surprising that venture cash is starting to flow into the male-focused ecommerce market.
The latest company to curry Sand Hill road favor is TouchOfModern, which today announced $14 million in Series B funding (via a mix of equity and debt). The round, which was led by Partech Ventures and included participation from Great Oaks VC, Lucas Venture Group, Silicon Valley Bank, and existing investors, Hillsven and Floodgate, brings TouchOfModern’s total funding to $17 million and followed a year in which the two-year-old company grew its revenue by 400 percent.
“Traditionally, men hate shopping,” says TouchOfModern CEO Dennis Liu. “What we’ve done is created a new experience that is less transactional and more inspirational.”
The company is geared toward men, and as a result has attracted an audience that is 70 percent male, but also includes a considerable number of female shoppers.
A trip to the company’s website, which promises “Daily sales of modern designs up to 70% off retail,” greets the consumer with a visual display of products that span electronics, home decor, fashion, and other lifestyle goods. At the time of writing, the first two highlighted products were a “dry odorless sock alternative” and a sleek, modern looking vaporizer (which I’m sure is meant for tobacco products).
The company works with over 6,000 vendors to source these products and has developed a reputation for the kind of unique, statement items that one might have previously found at the Sharper Image, Brookstone, or a luxury boutique.
It’s worth noting, that marketplace businesses are notorious for narrow margins and low customer loyalty. As long as TouchOfModern can offer its customers value through a unique (and curated) selection of products at attractive prices it should remain popular and relevant. But this is a hard formula to dial in and an even more difficult one to protect.
TouchOfModern may not be competing with Amazon for mass-market, commodity products, but there are numerous other destinations that promise a similar discovery experience. Among them, direct competition from The Fancy and Tapiture, fashion-focused experiences by Thrillist and Gilt, a mounting threat from Pinterest, and, despite recent shifts away from this marketplace model, a comparable offering from Fab.
Partech partner Nicholas Blaze doesn’t see any of the above as direct competitors, saying, “The focus on quality and novelty is what sets [TouchOfModern] apart from other ecommerce companies and we’re proud to be involved as an investor. Not only have they demonstrated significant growth in the last year, they have shown that they can excite a demographic that historically has been under-serviced in the retail landscape.”
TouchOfModern must also confront the substantial inventory management and fulfillment challenges associated with marketplace businesses. To that end, the company just moved into a new 60,000 square foot warehouse facility in Union City in San Francisco’s East Bay, in part with the goal of streamlining operations and reducing shipping times.
“We're one of the few ecommerce companies building a home in the Bay Area and we're keeping fulfillment here as well for the time being so that we can optimize our packing and shipping processes,” Liu says. “We're spending hundreds of thousands of dollars on automation equipment to build out the warehouse and make it more efficient.”
As a private company, it’s hard to assess just how healthy TouchOfModern’s business is today, but with its exponential growth rate and smart timing as it relates to the booming mens ecommerce opportunity, it’s little surprise that the venture community has deemed the business worth a big bet.
As countless other well-funded companies have proven, ecommerce is an extremely hard category in which to build a sustainable business. TouchOfModern has already found more success than most, particularly in the men’s category. But with new capital in the door, expectations are higher than ever. We’ll see if Liu and his team can continue executing.