Key Stats: WeLivv on Republic
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The WeLivv team has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to firstname.lastname@example.org.
E-commerce sales are expected to account for 13.7% of global retail sales in 2019 and that number is only projected to rise. Online marketplaces can make shopping easy, convenient, and can save time. Shopping online, however, has its limitations.
In 2018, the total revenue for online home furnishing in the U.S. was $10B. In total, U.S. home furnishing sales amounted to over $111B in 2016. Online furniture sales make up just a fraction of the total market—and for good reason. Shopping online for furniture is difficult. It is often hard to imagine the product in your home to judge aesthetic fit, nevertheless to match dimensions.
Quality matters to customers, especially for large purchases. Determining the quality of furniture intended to serve a specific need in the home for years to come is difficult, even in person. Online furniture shoppers are often forced to resort to judging quality as a direct relationship with price, which is not always the case.
In addition, home decor is a form of self-expression. Customers that look to find inspiration on platforms like Pinterest and Instagram have to then find products online that are not always linked, find reviews, and finally determine quality and fit. To date, there is no comprehensive platform for inspiration, design guidance, and shopping to aid in the process of home furnishing.
WeLivv wants to put an end to shopping for home decor in a vacuum. As a result, the team has created a comprehensive marketplace that tailors to consumers, designers, and brands alike.
By amassing millions of photos, WeLivv allows for customers to find inspiration and shop in one place. With an AI powered interactive smart search tool, customers can also get smart suggestions to narrow their searches, see details of a specific product, view similar spaces, see products also tagged in the photos of the space, and view the profile of the designer.
Brands also benefit from being an end user due to increased market penetration and awareness of their products. Finally, designers receive more recognition and benefit from an additional revenue channel based on commission for product sales that their photos influence.
WeLivv has some early traction with 4 million curated photos from 8,000 designers globally. Approximately 40,000 products are currently live in the WeLivv marketplace. WeLivv reports a 65% enrollment rate and conversion rate of 80% of those enrolled.
Gross revenues for 2019 are $13M and are expected to rise to $61M, $146M, and $256M in 2020, 2021, and 2022, respectively. Products can be purchased directly on the WeLivv platform, and WeLivv earns between 30-50% of the gross sale price. Specifically, WeLivv works with smaller manufacturers trying to get their products to market, allowing for mutual incentives.
Part of this growth will be driven by the several partnerships it has formed with home furnishing brands, including Vitra, Kartell, Artemide, and Moooi.
Founder and CEO, Andrew Christodoulides, has plenty of prior entrepreneurial experience, including a notable exit. He sold Acena, a telecommunications outsourcing service for over $3M. He also founded a home decor e-commerce site, Original Pad, which grew to $4M in annual revenue, from which WeLivv emerged.
Chris Christodoulides, Community Development Manager, followed Andrew in his two ventures, prior to which he founded his own company, Doggy Styles, a boutique puppy grooming salon, which is still active today.
Operations and Product Manager, Jose Coreas, has prior experience as an IT consultant with Product Design Group.
In terms of a comprehensive platform, WeLivv faces little direct competition. Few services offer a marketplace that meets consumer needs from inspiration to purchase. However, many notable larger incumbents are beginning to offer features in their already built-out marketplaces that aid in product visualization and fit.
Wayfair, for example, offers a 3D room planner, which allows a user to create a 3D replica of the room they are furnishing (see below).
Domino, another platform, prides itself in providing the inspiration that goes into home design, offering an e-commerce platform paired with a blog forum.
Houzz offers a slightly less engaging platform, with more hand holding from designers. It can be assumed that the target demographic is also slightly different, as Houzz aids in logistics for house planning.
Instagram, Amazon, and Pinterest pose a tangential threat, operating in one or more of the WeLivv spheres. For example, users may be more familiar with pinterest for finding inspiration and with Amazon for finding low prices and fast shipping, but WeLivv offers a comprehensive platform which to date is unique and proves to fill a market pain point.
Why We Like it
- Proof of Comprehensive Features through a Diverse User Base: The comprehensive nature of the WeLivv platform remains one of its strongest differentiators. This is perhaps most evident in the wide range of end customers it tailors to, including designers, brands, and customers. All three groups have strong incentives to use the platform, whether it be exposure and recognition, increased market penetration, or the comprehensive product features. WeLivv is a win-win-win.
- Promising Leadership and Strong Team: Not only does this team have entrepreneurial experience, CEO and Founder, Chris Christodoulides, has a notable exit and plenty of industry expertise. He has surrounded himself with a strong team which also includes entrepreneurs in their own right. A proven track record in startup founding is not only valuable, but rare.
- Early Traction and Low-Cost, Scalable, Growth Model: Not only does WeLivv already have plenty of photos and products available, but it also boasts partnerships with numerous home furnishing brands (see below). Future initiatives include a mobile experience “which will digitally connect consumers to (its) platform through physical products they come across anywhere, the ability to see products of interest – no matter where they are discovered – in photos of where they’re already being used anywhere in the world, and the ability to discover design ideas, professionals, and products in a rich, interactive way.” In addition, the photography-based model promotes extreme low-cost scalability, as it is nearly free to acquire mass amounts of photos.
The Rating: Deal To Watch
WeLivv is a Deal To Watch. The strong team of entrepreneurs has identified and filled a proven market pain point. One concern, however, is the very problem they came to solve—hesitance that comes with shopping for furniture online. WeLivv self-reports that online home furnishing “results in only about 8% of the mid-to-higher end of the market (16% of total $500 billion US market) being captured online.”
This obvious problem that serves as a pain point doubles as a concern for anyone entering the market. The concern is partially alleviated by early traction and high retention rates of existing customers (80%), but customer acquisition may prove difficult and is something to note.
So far as exits go, a positive acquisition in the space is definitely possible. Both Pinterest and Wayfair could be intriguing exit opportunities as these organizations look to improve their conversion within the home decor space with a more millenial-tailored buying solution. With this in mind, be sure to check out the current round of funding on Republic for this Deal To Watch.
About: Olivia strobl
Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.