The Luxury Closet has closed a Series B round of $7.8 million.
Led by Wamda Capital, the investment is one of the highest in MENA this year. The round includes Middle East Venture Partners (MEVP), who have been investing in the company since 2012, Equitrust, Saned Partners, Arzan Venture Capital and several other regional investors.
This investment comes quick on the heels of their Series A investment made in January this year. The company, founded by former head of sales at Louis Vuitton Kunal Kapoor, has been at the forefront of capitalizing on the growing demand of luxury items in the Middle East and globally, according to a 2015 Bain & Co, Annual Global Luxury study.
“Aided by global currency fluctuations and continued purchases by “borderless consumers,” the personal luxury goods market—the “core of the core” of luxury and the focus of the Bain Luxury Study - ballooned to more than €250 billion [around $280 billion] in 2015,” the report said.
An INSEAD article in 2016 also notes the Middle East is a growing marketplace for luxury items, perhaps aided by the region’s conservative culture driving a desire to flaunt designer items, such a handbags.
“A supersized LVMH handbag with large tassels, gold buckles and logo might turn the nose of any self-respecting, fashion-conscious Frenchwoman, but in places where the handbag is the only conspicuous accessory allowable by culture, or sometimes by law, somehow that form of expression begins to make sense,” the INSEAD report noted.
Driven by a desire to make luxury items more affordable, Kapoor began The Luxury Closet with a team of three in 2012. Today, the company has a team with over 15 nationalities, has acquired over 300,000 members, and nearly half million monthly visitors from around 60 countries.
"We have worked with various successful startup companies, and we believe The Luxury Closet has promising potential with their clear vision, business model, a sharp focus on individualized customer experience and, most importantly, a strong team," said Fares Ghandour, partner at Wamda Capital.
According to their statement, The Luxury Closet plans use the funding to accelerate regional reach, establish operations in Saudi Arabia, continue innovating in digital retail innovation, and develop a mobile app for an enhanced user experience.
“We are supported by some of the most amazing venture capital investors in the region who are helping us to build a large sustainable business,” Kapoor said.
Items on The Luxury Closet range from under $100 to over $100,000. The most expensive piece sold was a Chronoswiss watch for $36,000.
Feature image via Pexel.com