Peloton Founders Raise $25M for D2C Rug Venture Ernesta

Ernesta, a direct-to-consumer (D2C) custom rug company launched by three of the founders of Peloton — John Foley, Hisao Kushi and Yony Feng — has raised $25 million in a Series A round.

The capital will help Ernesta with its goal of expanding the domestic rug market — projected to grow to $120 billion by the end of the decade — by giving residential and commercial buyers the opportunity to buy “from a thoughtfully curated selection of rugs cut to fit their exact space,” according to a Monday (Nov. 7) news release.

The company, due to launch in the spring of 2023, said in the release it offers relief to customers facing months-long waits for decor items by providing an “agile, on-demand manufacturing process.”

Foley, the company’s CEO, said in the release he saw a “white space in the market” when he considered how confusing shopping for rugs could be.

“With Ernesta, our goal is to bring high-quality, custom rugs to a wide audience through a community-driven, curated and personal buying experience,” he added in the release.

Research by PYMNTS found that compared to other types of eCommerce merchants, D2C firms are offering the most user-friendly checkout experiences, a crucial competitive advantage when it comes to fueling sales and fostering loyalty.

“Building a Better Online Checkout Experience: The Key Features That Matter to Customers,” created in partnership with Checkout.com and drawing from a survey of 2,030 U.S. consumers, found that just 11% of shoppers experienced a frustrating checkout process with their most recent purchase directly from a brand.

By contrast, 13% were frustrated with the checkout process when buying from a merchant’s app or website, 16% when purchasing from a digital marketplace, and 38% when making a purchase from a social media platform’s marketplace.

Why does this matter? An unpleasant checkout experience can not only have a negative impact on a consumer’s perception of a brand; it can also lead them to abandon their would-be purchase before they get to checkout.