Americans locked out of the workplace have been remaking their home offices by adding desks, plants and wall hangings. Some of it so that they look a little more slick on Zoom calls.
The new interest in a beautiful home office has been a boon to furniture services like Fernish, which sells itself as an affordable option to upscaling your home. The rental service recently closed on a $15 million Series A led by Kosla Ventures, alongside other top investors including Scott Cook (founder of Intuit), Eytan Elbaz (founder of Scopely), and Jeff Wilke (Amazon's CEO of Worldwide Consumer), and Spencer Rascoff (founder of Zillow and dot.LA).
Armed with the new infusion of cash, Fernish Chief Executive Michael Barlow is looking to expand their reach beyond their service area of Los Angeles and Seattle metro. "We're literally spending 100% of our days in our home. People are taking stock of what it looks like."
Orders for home offices furnishings at Fernish surged 300% over the past two months, and May is tracking to be its best month for new signups since the Los Angeles company's founding in 2017. Fernish truly broke out a year later after joining L.A. accelerator TechStars, and raised $30 million in January 2019.
"Because you are on Zoom calls all day," Barlow said of many professionals, "you definitely want to have a nice decor set out there whether it be wall hangings, new lighting or otherwise."
Fernish, along with a growing list of venture-backed furniture rental companies including New York-based Feather and CasaOne from the Bay Area, pitch themselves as the antidote for young urbanites sharing apartments or setting up their first place to live. Adulting.
Fernish Customer Spotlight: Lizwww.youtube.com
They may want nice furniture but don't want to invest up front or schlep it to the next city they might live in. These startups give commitment-free options while promising to be more eco-friendly than disposable furniture.
Barlow was in part inspired to build the company with his co-founder Lucas Dickey when he was trying to convince his girlfriend to move to Los Angeles from the East Coast. Moving was expensive and he wanted to eliminate that, plus a lot of furniture becomes disposable.
The company has also pitched itself as part of the circular economy, as second hand and used items have become more digestible to the eco-conscious consumer. "Fast Furniture is out," reads one of the taglines on Fernish's website, tapping into the dueling consumer desire to do good and buy. "Tastes change, lifestyles evolve and we demand different things from our home over time," it goes on. "With Fernish you can refresh your style with high quality furniture that's built to last."
Fernish offers mid-century and modern furniture, partnering with CB2 and Crate & Barrel. Prices range from a $79 month for a mid-century meridian blue sectional worth $1,895 to $13 a month for desk with a Walnut top valued at $299. The company also offers a lease-to-own program.
The model is nothing new. For years, the rent-to-own industry has gotten a bad name as shady companies targeted poor people who couldn't afford big payments to buy furniture. But Fernish and other companies have upscaled the service by targeting professional millennials and Generation Z, who don't necessarily want to be stuck with expensive furniture or may not want added waste.
More than half of its customers came to the company before or after a move. The majority view furniture as a disposable asset. And it's finding new customers through one of its investors, Real Estate Tech Ventures, which counts apartment owners among its clients.
But will the success continue once the pandemic ends? Direct-to-consumer services like Amazon and furniture Wayfair have seen sales jump, even as they face logistical challenges.
Barlow is convinced the company is working within a larger trend toward a service economy that built up Uber and Lyft and spawned a legion of food delivery apps and fashion rental services that offer short-term access to high end products like clothes (Rent the Runway, LeTote).
He's not the only one. Others that have done well during the pandemic like mobile software provider Tapcart, think the forced move online will permanently shift consumer behavior as traditional retailers struggle to recover. Consumers have become more and more willing to pay for convenience.
Co-founder Lucas Dickey (L) and Chief Executive Michael Barlow (R) of FernishPhoto courtesy of Fernish
"While the quality of the product is still important, the point of differentiation between brands is now often dependent on their ability to market the service (and) delivery," said a report from Deloitte on the future of retail that was published before the pandemic took root in the U.S. "Premium charges are already a regular aspect of meal and grocery delivery services."
Furniture can be a capital-intensive business and the company has invested heavily in a proprietary system that helps it streamline supply management and complicated reverse logistics that it employs to retake possession of furniture and refurbish it. Dickey said the company sees its investments in their technology akin to that of Amazon's investment in Amazon Web Service, which offers company software service for companies and individuals.
"No one does merchandising and upselling or operations better than Amazon, so we're trying to follow in their footsteps," Barlow said. "Should we have 1% of their success, we would be very happy."
dot.LA co-founder Spencer Rascoff has a non-controlling investment in Fernish. Please read our Editorial Independence pledge for more information.
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Similar programs are common in the startup world and in the creator economy. For example, social media companies can use accelerator programs not only to support rising stars but to lure those creators—and their audiences—to the company’s platforms. Genies believes avatars will be a crucial part of the internet’s future and is similarly using its program to encourage creators to launch brands using Genies’ platform.
“I think us being able to work hands on with this next era—this next generation of designers and entrepreneurs—not only gets us a chance to understand how people want to use our platform and tools, but also allows us to nurture those types of creators that are going to exist and continue to build within our ecosystem,” said Allison Sturges, Genies’ head of strategic partnerships.
DIY Collective’s initial cohort will include roughly 15 people, Sturges said. They will spend three weeks at the Genies headquarters, participating in workshops and hearing from CEOs, fashion designers, tattoo artists and speakers from other industries, she added. Genies will provide creatives with funding to build brands and audiences, though Sturges declined to share how much. By the end of the program, participants will be able to sell digital goods through the company’s NFT marketplace, The Warehouse. There, people can buy, sell and trade avatar creations, such as wearable items.
Genies will accept applications for the debut program until Aug. 1. It will kick off on Aug. 8, and previous experience in digital fashion and 3D art development is not required.
Sturges said that the program will teach people “about the tools and capabilities that they will have” through Genies’ platform, as well as “how to think about building their own avatar ecosystem brands and even their own audience.”
Image courtesy of Genies
Founded in 2017, Genies established itself by making avatars for celebrities from Rihanna to Russell Westbrook, who have used the online lookalikes for social media and sponsorship opportunities. The 150-person company, which has raised at least $250 million to date, has secured partnerships with Universal Music Group and Warner Music Group to make avatars for each music label’s entire roster of artists. Former Disney boss Bob Iger joined the company’s board in March.
The company wants to extend avatars to everyone else. Avatars—digital figures that represent an individual—may be the way people interact with each other in the 3D virtual worlds of the metaverse, the much-hyped iteration of the internet where users may one day work, shop and socialize. A company spokesperson previously told dot.LA that Genies has been beta testing avatar creator tools with invite-only users and gives creators “full ownership and commercialization rights” over their creations collecting a 5% transaction fee each time an avatar NFT is sold.
“It's an opportunity for people to build their most expressive and authentic self within this digital era,” Sturges said of avatars.
The company’s call for creators could be a sign that Genies is close to rolling out the Warehouse and its tools publicly. Asked what these avatar tools might look like, the startup went somewhat quiet again.
Allison Sturges said, “I think that's probably something that I'll hold off on sharing. We will be rolling some of this out soon.”
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