Lyst Raises $85M in Pre-IPO Round - Fashion Industry News

E-commerce Investment Trends and Lyst's Pre-IPO Round

Investor interest in e-commerce remains strong, particularly as they analyze shifts in consumer spending following the Covid-19 pandemic. UK-based startup Lyst, a platform enabling direct sales from high fashion brands and retailers, has secured $85 million in funding. This round is characterized by the company as a ‘pre-IPO’ financing event.

Growth and Market Position

Lyst reports a user base of 150 million individuals actively browsing and purchasing from a catalog encompassing 8 million products sourced from 17,000 brands and retailers.

In 2020, the company’s gross merchandise value (GMV) exceeded $500 million, accompanied by a 1100% increase in new user acquisition. Lyst’s GMV has demonstrated consistent acceleration. Since its inception in 2010, the platform has facilitated over $2 billion in lifetime GMV.

CEO Statement and Future Plans

According to Chris Morton, Lyst’s CEO and founder, “Lyst is rapidly establishing itself as a leading force in the fashion sector, relied upon by hundreds of millions of fashion enthusiasts to inform their purchasing decisions.”

He further stated that while the company’s app and website already command substantial audiences in the USA and Europe, the broader e-commerce landscape for fashion remains largely untapped, presenting significant global growth opportunities. The newly acquired capital will be allocated to enhancing the personalized shopping experience for millions of customers and supporting the success of partner brands.

Potential IPO and Location

The company has been contacted regarding the timeline and potential locations for a public listing. While no official comment has been made, sources suggest London or New York as the most probable venues, with an IPO not anticipated for at least another year, potentially extending to three.

Investor Details

This funding round included participation from funds managed by Fidelity International, Novator Capital, Giano Capital, and C4 Ventures. Existing investors, including Draper Esprit, 14W, Accel, Balderton Capital, Venrex, and LVMH, also contributed.

Carmen Busquets, a strategic advisor and co-founder of Net-a-Porter, a competitor to Lyst, also increased her investment in the company.

Valuation and Competitive Landscape

Estimates place Lyst’s valuation near $700 million following this funding round, though the company has not officially confirmed this figure. Sources indicate that previous valuations by PitchBook were significantly underestimated.

Compared to competitors, Farfetch, another player in the same market, currently boasts a market capitalization of $14.4 billion following its public listing. The online fashion market is highly competitive, encompassing not only specialized portals but also established retailers, large marketplaces like Amazon, and increasingly, social media platforms such as Instagram, TikTok, and Snapchat.

Lyst's Evolution and Original Concept

Interestingly, Lyst originated as a pioneer in social commerce, enabling users to follow influential fashion brands and bloggers – precursors to today’s “influencers” – and receive alerts regarding new product releases and sales.

Proving the Viability of Online High Fashion

Initial skepticism surrounding the viability of selling high-end fashion items online has been dispelled. Lyst, along with its competitors, has demonstrated the potential of this market. The platform currently features brands including Balenciaga, Balmain, Bottega Veneta, Burberry, Fendi, Gucci, Moncler, Off-White, Prada, Saint Laurent and Valentino.

Pandemic-Driven Shifts in Consumer Behavior

The pandemic has accelerated these trends, with consumers who maintained financial stability often finding themselves with increased disposable income due to reduced spending on travel and entertainment. This led to a rise in purchasing goods, including fashion items, as a form of escapism.

The desire for self-expression and social validation through fashion remains strong, with consumers continuing to share their purchases and outfits on social media platforms.

Investor Confidence and Future Outlook

Nicola McClafferty, a partner at Draper Esprit, commented, “Lyst has achieved substantial progress over the past year with its leading app in the rapidly expanding online luxury fashion market – a trend expected to continue as consumers embrace digital habits and demand for fashion increases post-pandemic.”

She added that Draper Esprit, having supported Lyst since its Series A funding, believes this latest round positions the company for significant future growth.

Executive Appointments

In preparation for its next phase of growth, Lyst has announced the appointments of Mateo Rando, formerly of Spotify, as chief product officer, focusing on the company’s mobile app, and Emma McFerran, previously general counsel and chief people officer, as COO and a new board member.

Updated with additional valuation information. Additional reporting: Mike Butcher