Gilt Groupe gets $40M to make luxury online retail even glitzier

July 2, 2009 | Camille Ricketts | Comments |

Gilt Groupe, the online luxury-fashion retailer that sends its members sale and clearance information on expensive items, has taken in $40 million in capital from General Atlantic and Matrix Partners, reports The Business Insider. The New York company has been valued at $400 million and anticipates bringing in $500 million in revenue next year.

Gilt Groupe is able to offer its members better prices on luxury goods because it also acts as a channel for designers to unload excess inventory. With the economic downturn prompting a drop in discretionary funding, designers say they have more surplus on their hands than usual. To become a member, a user must receive an invitation — preserving the exclusive quality of the brands its sells, even at a 70 percent discount. Sales are conducted online and last about 36 hours.

Gilt has expressed interest in expanding into luxury travel packages and other areas that might appeal to an affluent or upper-middle class market. Founded in 2007, it has now raised $58 million to date.

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About the Author, Camille Ricketts

Camille is the lead writer for GreenBeat. She came to VentureBeat from Google where she worked on its traditional platforms team, particularly in TV. Before that, she was a reporter for the Wall Street Journal in New York and London. Follow her on Twitter at @camillericketts, and follow VentureBeat on Twitter at @venturebeat.

With GreenBeat 2009, VentureBeat's all-star conference on all things Smart Grid, coming up in November, Camille will be expanding coverage of this exciting space. Stay up to date by following @greenbeat2009 on Twitter or by becoming a fan of the event on Facebook here.

  • Foo
    What? Sales if 500m on margins of what? Let's really think about this: do they have infrastructure to move that much merch? Are they stocking it or are they merely acting as a cpc portal? If they were in fact shipping that much, what % of the market have they already captured and where us the growth opportunity. And if they have such revenues why raise venture money?

    500m in revenue but a 400m valuation on 60m investment. Something is screwy here.

    I don't believe it. Has anyone seen how crappy the site is? It's unusable. It's the most top heavy "start up" since webvan.

    And what's the deal naming a luxury goods company "Guilt/Gilt". Discount/distressed couture? I can see it going over big in Peoria.
  • MikeC4225
    Have you even used the site? I mean you are right in that it may not be the best designed site, and the shopping cart is sometimes really annoying. However, I have purchased fashion items from the site for almost a year now. They are always extremely high quality, and I pay 70% off retail price. Honestly, it is an amazing site. If you havent joined yet, you really should check it out. Since it is invitation only, and only members can access the sales, here is my personal invitation link: http://www.gilt.com/invite/michaeljcanine