The Cloakroom, an Amsterdam based online personal shopping startup, has announced its EUR1.2 million funding round, which closed a couple of weeks ago. The money was raised with a consortium of lead investors Connect Ventures and angels Hein Pretorius (Naspers) and Kees Koolen (former CEO Booking.com).
The Cloakroom was founded roughly a year ago by Danish entrepreneurs Kasper Brandi Petersen and Asbjorn Jorgensen. The two choose to base themselves out of Amsterdam because of the startup scene which is gaining more and more traction, as well as the good reputation of the city when it comes to fashion and e-commerce.
Personal shopping experience
The concept of The Cloakroom is similar to that of Berlin based Outfittery (also active in the Netherlands) and British Thread. Cloakroom employs an ever growing number of attractive, fashion savvy ladies, who handpick ‘looks’ for their male clientele. Each new client answers a questionnaire, gets matched to and measured by a personal shopper and can then start receiving customised outfits.
Clients are free to return whichever items from the selection that they are not happy with and only get billed for those they keep. This significantly lowers the barriers for guys to give these new looks a try. However, guys that return items do risk the wrath or some further convincing of their personal shopper, who give their clients a call to discuss their selection after it has been received.
This model also means logistics play a key part in this startup’s life, with the founders agreeing that execution on this point will make or break their business. Interestingly The Cloackroom’s model implies that every box will be send back, with at least some items. This makes planning returns easier than for a business like Zalando, which is also faced by high return shipments, but is confronted with significant volatility and uncertainty.
Clothes are picked in a sizeable 300m2 showroom in the center of Amsterdam, filled with items of various brands and designers. The team has secured partnerships with well-known fashion brands such as Hugo Boss, Scotch & Soda and Tommy Hilfiger. However, they prefer to also feature smaller, more bespoke and independent brands, like Ben Sherman, Bruuns Baazar, Lyle&Scott & Velour. Pricing is on par with that in regular stores, with the personal shopper being free of charge to the men.
The team raised their new funding of EUR1.2 million to be able to grow their working capital and maintain their rate of growth. Working capital requirements for the business are significant with multiple hundreds of thousands of euros in transit on the road to clients on an ongoing basis. The round was lead by Connect Ventures, a London based micro VC firm, that actively invests throughout Europe. Joining in the round were South African angel Hein Pretorius (former CEO of Nasper, a large South African media company) and Dutchman Kees van Koolen, who made the most significant part of his fortune as CEO of Booking.com.
Photo credit: The Cloakroom