March Is In Like A Lion

When Sophia Amoruso’s first version of Nasty Gal launched in 2006, it was as her personal store on the eBay marketplace. That small, original venture developed a reputation for eclectic and edgy fashions combined with a young, visible and fashion-forward following. Fast forward nine years, and that small-time online retailer is now an international e-commerce presence.

Not to mention the Internet’s go-to location for crocheted rompers.

And since its humble origins, Nasty Gal has gone on to raise $65 million in VC funding, most recently closing a $16 million dollar round. The firm also brought in $100 million in revenue in 2012, as its reputation among millennial shoppers began to go viral. Additionally, Amoruso has become known as a thought leader, particularly among female entrepreneurs in the e-commerce sector. She even penned “#GIRLBOSS,” a best-selling book on the subject.

However impressive Nasty Gal’s early track record has been, however, like most startups, its path has not been without roadblocks. According to reports, the e-commerce company saw its revenues plateau in 2013-2014, though the the company did not release figures. It was also reported that the firm laid off 10 percent of its workforce, including some executives. The firm declined to offer numbers, although Amoruso has affirmed that the company is profitable with over 250 employees.

“We are always pushing growth and we have established a very involved customer base – going forward we want to make sure we continue to grow in a way that is directed and consistent with our brand values,” a source close to the brand noted.

A strong sense of direction will likely come in handy for the digital clothing retailer as 2015 is already shaping up to be a highly eventful year. They plan to continue their transition from online only to being in both the digital and physical world by opening a second retail location (following its first LA-based store at the end of 2014).

They will do this under slightly different management. Amoruso announced in January 2015 that she will no longer be serving Nasty Gal as CEO, though she will stay on as the firm’s executive chairman.

“Over the course of the past year, it’s become evident that I am the brand connector — both to the world at large, to influential individuals and organizations, and to our customer,” Amoruso wrote on her blog. “And it’s also become resolutely clear that I and Nasty Gal are ready for a move. I’ve been thinking about that for going on two years now. As you know, part of being a #GIRLBOSS (and just a decent human being) is about playing to your strengths. I’ve been wondering for a while now if the CEO role is one that I want – and the one that I’m best at.”

Amoruso promoted Nasty Gal’s President and head of product, Sheree Waterson, to take over her role.

“I actually see myself as support to Sophia so we can unleash her genius,” Waterson said. “Taking over the operation of the company allows Sophia to be out and connecting the brand with our customers and all the other amazing people she meets.”

Waterson’s ascension to CEO was immediately followed in the headlines by the closing of the $16 million Series C round. That round was led by the former J.C. Penney CEO and architect of Apple’s retail store, Ron Johnson. Johnson is also the founder of e-commerce startup Enjoy.com, and he will be joining Nasty Gal’s board.

“Obviously we are all very excited about Mr. Johnson’s insights particularly as we are really looking to move into physical retail, which is largely what this funding round will be going toward,” Waterson noted.

Some segment watchers did express concerns at Nasty Gal’s small Series C round, noting that during the prior Series B round the startup took in $40 million.

Amoruso is on the record saying that the size of the deal was a reflection of her company’s narrow interest in opening physical locations as well as a desire to hold on to equity in her firm.

“We don’t have an aggressive rollout planned,” she said. “We want to get another [store] open, learn a lot and then hopefully destroy everyone.”

From an outside perspective, the future is full of possibilities for Nasty Gal, but also challenges as it navigates the path from up-and-coming digital startup to established retail player. However, it enters the challenge capitalized and popular, and with an executive chairman who is clearly looking forward to looking forward.

“My entire youth has been Nasty Gal. My entire future is Nasty Gal,” Amoruso noted in her resignation from the CEO post. “This is a choice that will give our team, and our business, legs. And it will give me the freedom to feel that I’m using my talents at my best and highest.”

March is in like a lion for payments space, with $877 million invested in total. As has been the trend in 2015 so far, strategic- or venture-backed investments lead the space with figures of $635 million during the first week of March on the retail payments side.

Retail payments on the whole took up 72 percent of the week’s activity. Most of the venture- and strategic-backed investments in retail payments were in the mobile money, security/fraud and data analytics related to retail, shopping, commerce areas – those categories accounted  for 94 percent of the total retail payments investments. On the commercial side, the biggest move was the acquisition of BNN Solutions by Madison Logic.

The biggest play of March’s first week was Paydiant’s acquisition by PayPal for $280 million, followed by eXelate’s acquisition by Nielsen for $200 million. PayPal and DreamIt Ventures participated in two deals this week.

From a geographic perspective, the U.S. was the most active region followed by the Middle East.  The median investment amount was $7 million.