Brooklinen, the DTC luxury bedding and home essentials retailer, has raised $50 million to expand its brick-and-mortar footprint, enter new domestic and international markets and develop new wholesale partnerships. The retailer plans to establish as many as 30 store locations over the next three years, including two this year, and open more warehouses to support its global expansion.
Founded and developed by husband and wife Rich and Vicki Fulop in 2014, Brooklinen positions itself to offer shoppers a curated collection of luxury-grade linens at an accessible price point.
The retailer started to expand its offerings in late 2018, launching a SoHo pop-up, adding new categories like loungewear to its product lineup, launching a curated “Spaces by Brooklinen” home goods marketplace and opening its first permanent brick-and-mortar store in Brooklyn, N.Y.
While Brooklinen’s execs feel the international market is ripe, it’s almost entirely uncharted territory. As much as 98% of Brooklinen’s business currently is in the U.S., Rich Fulop told The Wall Street Journal. The company first plans to expand abroad by targeting other English-speaking markets.
The investment comes from private equity firm Summit Partners, which declined to discuss the startup’s valuation. Brooklinen previously raised $10 million from venture-capital firm FirstMark Capital in 2017.
The venture funding comes at an interesting time for DTC brands, particularly as heavily funded companies such as Casper have failed to live up to their massive valuations and have yet to turn a profit. Brandless, another DTC retailer, shuttered its operations entirely in February despite raking in approximately $290 million from investors.
When combined with the WeWork fiasco, with the real estate company once valued at $47 billion falling to $8 billion and being forced to withdraw its IPO amid monumental quarterly losses, more public and private investors are seeking transparent, sustainable results from companies before committing any capital.
However, the Fulops say Brooklinen is profitable, indicating that the retailer neared $100 million in revenue in 2019, a 40% increase from the previous year. The combined profitability, revenue and customer retention rate made Brooklinen an enticing investment for Summit Partners.
“We won’t invest in companies that are losing money,” Christopher Dean, a Managing Director with Summit Partners, said to the WSJ.