The second wave of e-commerce is coming, buoyed by a flood of fresh cash. European flash-sales site operator Privalia, which offers short-term, steeply discounted fashion deals in Spain, Italy, Brazil, and Mexico, is expanding to Germany with a $280 million acquisition of rival Dress-For-Less.
The deal is funded in part by $123 million in fresh cash from General Atlantic, Highland Capital Partners, Index Ventures, and Insight Venture Partners, as well as debt and newly issued shares.
Those are big numbers, and they come on top of a $95 million round just last October from General Atlantic and Index.
Privalia is a private-sales site that offers members deep discounts on apparel and other items for a short period of time. Others in the flash-sales category include Rue La La, now owned by GSI Commerce; Gilt Groupe, which offers deals in apparel and travel; and One Kings Lane, a home-décor site. The limited time horizon for offers, combined with a curated array of merchandise and new social tools, serves to drive demand from consumers looking to buy something new.
That customer base — those who view shopping as entertainment and largely made up of women — is potentially much larger than the hardcore online shoppers who became loyal online shoppers a decade ago.
The first wave of e-commerce, transactional and efficient, did catalogs one better by offering a nearly limitless array of merchandise and selling it cheaply and quickly. It satisfied demand, rather than creating it.
Private-sales sites, daily deals purveyors like Groupon, and other new forms of e-commerce promise to do something much bigger and more difficult: create demand. Successful traditional retailers excel at this, turning their stores into showcases of consumer delight and convincing people to reach for their pocketbooks for something they had no intention of buying when they walked into the store.
Privalia seems to have an edge in fast-growing overseas markets. Gilt currently operates in the U.S. and Japan. GSI, which is publicly traded, spent $350 million acquiring Rue La La and could expand quickly. A lot of capital is flowing into the sector. But unlike earlier waves of e-commerce, which required building and stocking warehouses to guarantee the availability of those vast virtual shelves of merchandise, the new e-commerce tends to move products quickly, making it an appealing investment to venture capitalists who might shy away from plowing their capital into inventory.
Instead, the money in this second wave of e-commerce is going into customer acquisition, technology, and some financial maneuvers — like Privalia’s rollup of Dress-for-Less.
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cheeser
March 6th, 2011 at 1:37 pm
hes aight,… nuthin new tho.. where are the unique new artists that arent following trends..
concept is cool and kinda new… but noone sings anymore
[Reply]
Tawny
March 6th, 2011 at 1:37 pm
He’s the future.
[Reply]
Tony
March 6th, 2011 at 1:37 pm
Best song on the album.
[Reply]
My2Cents
March 6th, 2011 at 4:50 pm
Novacane Is Also A GREAT Track.
Brilliant FRESH New Artist.
[Reply]
La'Wayne
March 6th, 2011 at 6:35 pm
aka Lonny Breaux…He’s off the fuckin chain
this aint his best tho
[Reply]
DEEPERthanRAP
March 6th, 2011 at 6:57 pm
R&B??? wtf?
[Reply]
Lil' Nello
March 6th, 2011 at 8:54 pm
Song is pretty good except for the couple parts where he sounds to much like Wiz!
[Reply]
The Beast
March 6th, 2011 at 9:00 pm
Yonkers was some scary sh*t. I like this though.
[Reply]
hey
March 6th, 2011 at 11:33 pm
Ciara tweeted about this guy! listen to novacane!
[Reply]
jaa
March 6th, 2011 at 11:39 pm
‘strawberry swing’ is a devastating song.
same goes for ‘there will be tear’
i like the off center subject matter.
[Reply]
Leon
March 7th, 2011 at 4:10 am
The world doesn’t need another Drake; the one we have is devoid of worth and significance.
[Reply]
Douchebag Dude
March 7th, 2011 at 4:16 am
Nobody sings anymore. Even “love songs” arent real love songs. I’d rather these idiots copy Stevie Wonder or other classic artists than the current bs out now.
[Reply]
AAA
March 7th, 2011 at 5:26 am
I love this song I heard it!!!!!!! So good
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Yes SIR
March 7th, 2011 at 8:05 am
Novocane is a helluva SONG!.. Frank Ocean is my near favorite artist!
[Reply]
Bernie
March 7th, 2011 at 10:36 am
dam iiiiiiiiiiiiiiiiiiiiiiiiiiiiiit !
[Reply]
HipHopDiva
March 7th, 2011 at 11:58 pm
his ablum is really good. don’t sleep. check out “we all try” its a beautiful song :) here’s the link youtube.com/watch?v=NtZh_zWEcpY
[Reply]