Fashion e-retailer Lulus said Wednesday it has raised $120 million U.S. from venture capital firm IVP and Canada Pension Plan Investment Board.
The fundraiser demonstrates the continued bets that investors are willing to take on the start-ups looking to take on the rapidly changing retail industry.
Founded in 1996 by Debra Cannon and her daughter Colleen Winter, Lulus is an online website and fashion brand that caters to shoppers in their twenties.
It calls its clothes fashionable and affordable — shoppers can buy a $96 champagne-colored maxi dress for prom or a $52 wrap dress for graduation.
More than 85% of the website is Lulus branded clothes, though it sells other brands like Free People as well. Lulus has also begun to sell its clothes in Nordstrom (NYSE: JWN) stores.
A large part of the brand's success has rested on its social media prowess, fostering a loyal shopper base frequently reminded of the brand's prevalence.
With its new funds, Lulus plans to support growth initiatives like building out its East Coast fulfillment center, going into new categories like shoes, and building out headcount.
It has no short-term plans to build out brick-and-mortar stores, but the company isn't ruling out the idea either.
Lulus has "been built on a foundation of profitability," said Winter. It has "a couple hundred" million in sales and has been profitable since its first year. It has been growing a rate of roughly 50% yearly and has "very meaningful" EBITDA margins.
