According to The Wall Street Journal, designer flash sales website Fab.com is raising between $250 million and $300 million. The funding is expected to close in mid-June. Atomico, a venture capital firm created by Skype co-founder Niklas Zennstrom, is leading this round.
In July 2012, Atomico led Fab.com’s $105 million round at a valuation of $600 million. When this round of funding happens, Fab.com is expected to have a valuation of over $1 billion. Fab.com has raised $171 million thus far so this would put them at over $420 million in funding.
What Is Fab.com Doing With All This Funding?
Late last month, Fab.com announced that they are opening a retail store in Hamburg, Germany. The company is also going to launch their own exclusive products
Last year Fab.com hit almost $125 million in sales and they are expected to hit $250 million this year. As of December 2012, the company hit around 10 million users. Currently the website has 12 million registered users. This is up from 5 million in July 2012.
Fab.com is not profitable yet due to their aggressive expansion. The company is spending heavily on marketing and acquiring new customers. They are also spending heavily on infrastructure that is required for fulfilling and shipping orders. The company is expected to burn through over $60 million this year because of the expansion. Fab.com is expected to hit break even at the end of next year.