Furniture e-retailer Made.com aims to rival Ikea, raises $60M for European expansion

Online furniture retailer Made.com sets its sights on becoming a pan-European rival to Ikea as the UK-based company receives funding worth $60M for its European expansion from Fidelity Growth Partners and Partech Ventures.

Partech is an investment firm supporting internet start-ups while equity investor Fidelity backs entrepreneurial IT firms.

Made.com chief executive Ning Li said the money would be used to "invest aggressively" in the UK, Italy, Germany, Belgium, and the Netherlands.

For the past two years, Made.com has been growing in Europe, with France and Italy as its first non-UK territories.

Made.com is doing particularly well in Germany, the biggest furniture market in Europe. This is in contrast with furnishing start-up Fab.com which failed in Europe despite raising $336M in capital.

Li believes that Germany is vital in order to ultimately become a market leader for furniture in Europe.

"The market in Europe is highly fragmented. Only Ikea has broken out beyond its national borders", Li explained.

Li said investment for the German expansion would be minimal, as Made.com's existing hub in France could service the new market.

Currently about 10% of furniture sales goes to Ikea, while "national leaders" like DFS in the UK take some 40%. The balance goes to "mom and pop" firms.

"We want to consolidate those markets," Li said.

Despite the Greek crisis, trading through the year is strong, said Li. Last year, revenues grew 63%, and international sales are at 30% of turnover, which Li expects to go up 50%.

"Greece hasn't affected consumer confidence in buying furniture," he said. "We are independent of these kinds of economic issues."

As part of the deal, Partech's Bruno Cremel is joining Made.com's board. Susanne Given, formerly of fashion retailer SuperGroup, has also been named independent director to help the e-retailer scale.

"The model is very scalable because we operate online," he added. "To triple revenue, we don't need to triple headcount because we don't open shops."

Made.com employs 170 people in the UK and Shanghai.

The company was conceived by Li while the 33-year-old entrepreneur was trying to furnish his Paris flat with affordable designer furniture.

Together with Lastminute.com co-founder Brent Hoberman and two school friends, Li launched the company in 2010. The founders retain a majority stake.

Made.com works closely with designers and manufacturers around the world to create fast-fashion items, from sofas to bicycles.

The furniture is shipped directly to customers, cutting off middlemen and allowing the company to offer up to 70% below high street price.