Intriguing Interiors with an Entrepreneurial Edge

I think most of us agree that a well-decorated space goes a long way.  In recent years, Houzz has become a relatively great success within the interior design e-commerce market.  With over $165M total raised (currently being led by a tier 1 investor), one acquisition under their belt, and great upside potential for an IPO, they’re currently the largest of their kind. While becoming a venture-backed (design) company certainly isn’t right for every organization, several smaller entrepreneurial interior design platforms are blossoming within the e-commerce market and are worth a look. Let’s check em’ out.


Decorist

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About | Decorist is a leading online interior design company, providing design services for residential and commercial spaces. Decorist works with each client’s style and budget to transform their space(s). When purchasing a Decorist Design Package, the customer gains access to the Company’s team of professional interior designers, who are located all over the United States. People use their services to design everything from their homes, apartments, offices and even outdoor patios. It’s Easy, Affordable, and Entirely Online.

The client begins by discovering their specified interior design style with the Decorist Style Quiz. They then select and purchase a Decorist Design Package, which starts at $299. Each client receives two concept boards for their space, provides their designer with feedback, and is then provided a copy of their final design. The last design is complete with all additional information needed to create the space; final design board, how-to instructions, floor plan, and a shopping list. Each client also receives access to the Decorist’s complimentary “Order for Me” purchasing service, where they have researched the best prices on all chosen furniture. All designs are fully customized for each space, the client’s budget, and their style in mind.

My competitive analysis | The Decorist was founded in 2012 and has raised $3.9M to date (in early 2015). They’re revenue recently declined and is currently estimated at around $2.5M. They run a relatively lean operation as they only employ about 2o people. While this is a vague statement, their success is entirely dependent on their monthly cash burn, the size of their next round, and the direction that their revenue now goes. I give them a 40/60 shot at success of becoming a later stage operation.

Headquartered | San Francisco, California   Total Raised | $3.9M in 1 (Seed) Round

Havenly

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About | Havenly provides interior design services (all of which is online) at a remarkably accessible price point. For a flat fee starting from $79, the Company sets you up with a personal interior designer, which is matched exclusively to your style. The designer works with you virtually to decorate your room. You can purchase any of the products your designer suggests through Havenly directly, all in one place, at the lowest price. The purchases for the room are then delivered directly to your door.

Havenly serves a personalization layer over the furniture e-commerce market. They take the customer’s style and inspiration data to assist each designer in the design of the space and continues to provide customized suggestions for products to spruce up the space.–helping to simplify the decorating process.

My competitive analysis | This one’s a bit tricky. They’ve raised a decent amount of funding, however; the market was already quite saturated when they came in, meaning they will face more barriers to gain traction (to entry). However, in recent months their revenue has been on a steady incline. Their lower price point, comparatively, is what immediately sets them apart.  I think they’ve got a 50/50 shot of surviving long-term as, at first glance, I don’t see a tremendous amount of differentiation.

Headquartered | Denver, Colorado      Total Raised | $13.32M in 2 Rounds

Laurel & Wolf: Online Interior Design

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About | Laurel & Wolf makes professional interior design accessible and affordable. The Company virtually connects their marketplace of professional interior designers with people who are looking to create a space. Clients begin by answering questions with regards to their space, budget, lifestyle, and taste. They then receive “First Looks” from multiple interior designers. After reviewing each design, the Client selects one designer to work with directly to complete the area. Each final project includes a digital customized style board, detailed shopping list, floor plan and set-up instructions from the designer.

The approach behind Laurel & Wolf came from Leura Fine, a long-time professional stylist based in LA. She recognized the dramatic shift taking place in design, which she attributes to the inspirational boards and images shared on sites like Pinterest and Instagram, and the popularity of e-commerce sites that allow shoppers to acquire exceptional design at affordable prices. Laurel & Wolf helps to mitigate the fear of cost (and time) typically involved in finding and hiring a designer, therefore enabling clients to make their design dreams a reality. Laurel & Wolf also expands the crowded interior design market by providing artists with the opportunity to get their work rated, earn extra money, build their brand, and connect to new demographics.

My competitive analysis | They’ve received a lot of funding, $20M of which has come from Benchmark Capital Partners, who has a relatively stellar track record (Instagram, Dropbox, Twitter, SnapChat, etc.). There is a good chance that Benchmark will continue to lead this round as needed if proper organic growth continues. Given the size of their operation (around 40 employees, which is somewhat large) and an estimated revenue of $2.1M annually (which has grown fairly steadily in TTM), I think they’re 40% likely to be acquired and could potentially IPO, dependent on their future growth.

Headquartered | Los Angeles, California   Total Raised | $31.0M in 4 Rounds

Modsy

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About | Modsy is a home design company that enables consumers to visualize design ideas in the context of their very own home. The Company was founded in February 2015 by Shanna Tellerman. Modsy uses a novel approach to home design which uses sophisticated 3D rendering solutions, which turns photos of clients’ rooms into the swanky home of their dreams. This startup has built a service that can bring professional interior decorating to the masses.

Initially, the homeowner takes several pictures of the space they want to be redone — ideally a photo from each of the room’s corners. Then, these images are uploaded to Modsy, after which the homeowner takes a style quiz about their likes and dislikes, this takes about 5 minutes and involves clicking on photos. Then Modsy takes over. About 48 hours later, the results are delivered. The homeowner receives a package of media including intricate renderings of their room complete with new furnishings and flooring and the fripperies. It’s a complete room makeover. The Company puts everything in your room. The service also delivers a virtual reality view of the space. This VR view is a crowd-pleaser and sets Modsy apart. The image loads on a smartphone and the viewer can stand in the middle of the room to get a sense of the new design.

My competitive analysis | Modsy was founded in early 2015, making them a relatively late addition to the home design solutions game. The Company has done a good job of differentiating themselves with their personalized design experience. By using computer vision, 3D capture, and photo-realistic 3D rendering tools primarily used by today’s leading film and gaming companies, Modsy takes a technology-focused approach to home design and creates an experience that everyday consumers can use. Their annual revenue is under $1.0M, meaning they’re definitively early staged, this (inevitably) makes it difficult to tell what direction they’ll go.

Headquartered | San Francisco, California   Total Raised | $8.0M in 1 Round

Here are a few other related links that I stumbled upon that you might enjoy:

Have any of you used these services? I’d love to hear about your experiences.

Enjoy (taco) Tuesday, Everyone!

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