Gilt Group Raises $138 Million Now Valued at $1 Billion

Manhattan-based Gilt Groupe has raised $138 million in its most recent round of funding led by Japan’s Softbank Group and Goldman Sachs Group. Other investors included New Enterprise Associates and Draper Fisher Jurvetson Growth along with two previous investors, General Atlantic and Matrix Partners. This latest round of funding values the online retailer, noted for flash sales of women’s and men’s fashion, at approximately $1 billion.

“It’s a good market, and we’re doing well,” Chief Executive Kevin Ryan said. The company has said will post up to $500 million in revenue for the 12 months ending this June. Although some of Gilt’s businesses are making money, the company as a whole isn’t as it invests in expanding into new areas. Profitability is “not a top priority,” Mr. Ryan said.

Softbank will be investing $62.5 million for a 50 percent share in Gilt Groupe Japan. As part of the joint venture Softbank will also include additional investments in cash and other resources.

Gilt is in the process of moving away from the focus of flash sales that originally gained it notice in the group buying industry and is moving toward becoming a full priced retailer in the upscale market.

“Over time,” Mr. Ryan said, “people will think of Gilt as a high-end retailer that has a lot of flash sales sites and also full-priced items.”

A Gilt IPO is said to be a possibility but not in the near future since Mr. Ryan said they don’t need the money, at least not for the next 12 months but that an initial offering might be in the picture at a later date,

Source: DealBook, The Wall Street Journal