FashionValet the wiser second time around

• Money doesn’t automatically make money
• 2014 revenue tripled to over US$1mil

MUCH wiser today, two and a half years after he raised the first round of funding, RM1 million (US$320,000) through Malaysian e-government services company MyEG Services Bhd, the founder of local fashion e-commerce site FashionValet.com, Fadzarudin Anuar, declares himself much better prepared to invest the “multimillion-dollar” round it announced on March 3.
 
The investment was made by Elixir Capital, via its US$50 million (RM183 million) ECM Straits Fund. Elixir Capital is a private equity firm based in Silicon Valley, California. [Edited to add the name of the fund used for the investment.]
 
FashionValet describes itself as the first Malaysian multi-label fashion e-commerce site. It has a focus on local designers, and says it delivers value by aggregating and curating the best local brands for customers.
 
Both FashionValet and Elixir Capital prefer to keep the amount invested private.
 
Elixir Capital was already active in Malaysia prior to this investment through ECM Straits Fund established in 2014, where government-owned Malaysia Venture Capital Management Bhd (Mavcap) is a lead investor. It is using Kuala Lumpur as its Asian base to source for deals in Asia.
 
“When we raised that first round in 2012, we thought money would solve everything – that is, just pump more money into the business and it would automatically make more,” Fadzarudin (pic) tells Digital News Asia (DNA) via email.
 
Instead, it became a very expensive lesson in realising that money does not automatically make money. “We found stuff which we did with little money actually giving us better results,” he adds.
 
Armed with that chastising experience, FashionValet is a more experienced company today and will spend the current investment in much more impactful areas to power the growth of the business.
 
That growth initially reached a plateau in early 2014. “So, we relooked our business carefully then and identified the main areas holding us back, and did everything we could to overcome them, including dropping some parts of the business,” shares Fadzarudin, declining to be specific for competitive reasons.
 
The results were spectacular. He claims that revenue for 2014 more than tripled and was over US$1 million, with customers mainly from Malaysia, Singapore and Brunei.
 
That in turn led to its current investment, with Elixir Capital even confident that FashionValet could list on the Bursa Malaysia stock exchange in the future.
 
Keeping his options open, Fadzarudin says the goal is to build the company to be relevant 20 years from now.
 
“We will be looking towards creating a self-sustaining model. We will go for an IPO (initial public offering) if it makes sense, but if we can grow and generate good value for our shareholders privately, then we'll do that.
 
“Also, if somebody comes along and gives us an offer we feel is worth thinking about, then we'll look at that too,” he says.
 
Fadzarudin, who runs FashionValet with his cofounder and wife Vivy Yusof (pic), says the company didn't need to raise funding earlier because it was generating enough cash flow internally. “We have been growing at a minimum of twofold a year since we started in October 2010.”
 
It has since expanded to Indonesia.
 
“We’ve had people on the ground in Jakarta for a couple of years now, and this year we plan to expand that from a team of buyers to establishing warehousing and logistics,” he says.
 
While FashionValet’s official statement on the Elixir Capital investment mentioned regional expansion as being on the cards, Fadzarudin declines to identify which cities these will be. “But the bulk of our efforts will still be in growing our Malaysian market as I feel we can still grow so much here.”
 
Part of that growth will be driven by big data. Explaining this, Fadzarudin says that using data is already embedded in FashionValet’s operations.
 
“We have built in a feedback loop to constantly give us a better understanding of our business. But we didn't have the resources to act on many of the findings. Now, however, we'll be able to do more with the feedback,” he declares.
 
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FashionValet secures ‘multimillion-dollar’ investment from Elixir Capital
 
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