Armed With a Fresh $15M Raise, Fernish Plans Expansion as America Redecorates Under Quarantine
May 27 2020
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).
<p>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."</p><p>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 <a href="https://www.techstars.com/accelerators/los-angeles" target="_blank">TechStars</a>, and raised $30 million in January 2019.</p><p>"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."</p><p>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.</p><p class="shortcode-media shortcode-media-youtube">
<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="f5ba267a8b99102adbd3e4f8b54982cf"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/92gyyoLn2Fs?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span>
<small class="image-media media-caption" placeholder="Add Photo Caption...">Fernish Customer Spotlight: Liz</small>
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<a href="https://www.youtube.com/watch?v=92gyyoLn2Fs" target="_blank">www.youtube.com</a></small>
</p><p>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. </p><p>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.</p><p>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."</p><p>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. </p><p>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. </p><p>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. </p><p>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.</p><p>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). </p><p>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 <a href="https://dot.la/search/?q=and+tapcart" target="_blank">permanently shift consumer behavior</a> as traditional retailers struggle to recover. Consumers have become more and more willing to pay for convenience.</p><p class="shortcode-media shortcode-media-rebelmouse-image image-crop-16x9">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzMyNTQwOC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzMjE3MjYyMH0.SzgBZm7teDJq7Vxt2y6KeJYJ0mV62UKyyJGyXv176rY/image.jpg?width=1245&coordinates=0%2C416%2C0%2C384&height=700" id="4383a" class="rm-shortcode" data-rm-shortcode-id="e664e6d488301e99e62fc613126048d9" data-rm-shortcode-name="rebelmouse-image" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">Co-founder Lucas Dickey (L) and Chief Executive Michael Barlow (R) of Fernish</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Photo courtesy of Fernish</small></p><p>"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."<br/></p><p>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. </p><p>"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."</p><p><em>dot.LA co-founder Spencer Rascoff has a non-controlling investment in Fernish. Please read our <a href="https://dot.la/editorial-independence-2645130492.html" target="_blank">Editorial Independence pledge</a> for more information.</em> </p>
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Every venture capital fund likes to insist that they are unique even though they usually all operate from the same playbook. The Fund, which quietly launched in Los Angeles earlier this year — two years after starting in New York — is actually different.
It is a venture fund for those who eschew venture funds. No professional investors are allowed, there is no full-time staff, and it charges a reduced management fee.
<p>Instead of traditional limited partners (LPs), <a href="https://www.thefund.vc/community/la/" target="_blank">The Fund</a> gets capital from dozens of what it calls "community members" who are all successful founders and operators who invest starting at just $25,000. It aims to have a 1:1 ratio of investors to founders so that founders can get as much mentorship as they need starting their young companies.<br/></p><p>"People really want to keep capital here," said Anna Barber, a member of the investment committee who also serves as managing director of the Techstars Los Angeles Accelerator. "We see that more than in other places. We see founders who have had success in L.A. want to support L.A."</p><p>Anchor members include Kevin Datoo of Dollar Shave Club, Chad DePue of Snap, Susan Paley of Droplabs, Carolyn Becher of HopSkipDrive, Robyn Ward of Founderforward, Dan Gould of Tinder, and Tony Wang of Agora. (Spencer Rascoff, executive chairman of dot.LA, is also a member.) </p><p>The cohort is deliberately spread across different industries. "We want to bring together different parts of the L.A. ecosystem," said Barber. "We have access to knowledge about what is happening and the ability to help companies we've made investments in."</p><p>The Fund has already backed two startups – it won't disclose which ones yet – and committed to two more. The goal is to make 50 investments in L.A. over the next two years, with checks in the $50,000 range. It aims to raise $3 million, which is tiny for a venture fund, but Barber sees potential in going smaller as other seed funds write progressively larger checks.</p><p>"While there's been growth in early stage investment, we think there's a really big opportunity in pre-seed and early seed," said Barber.</p><p>It might seem like a daunting time to be starting a new fund. However, The Fund is hoping there will now be more opportunities at lower valuations and says most of its decisions were made remotely even before the pandemic.</p><p>"We really run everything through Slack," said said Raina Kumra, another member of the investment committee and CEO of Juggernaut, a marketing agency. "We're getting pretty good at FaceTime and Zoom. It's not that much of a leap."</p><p>If a member sees a deal they like, they post it in Slack. If there is buy-in from the membership, the idea then goes to the investment committee – which also includes Austin Murray, founder of JAMDAT Mobile and Josh Jones, founder of Dreamhost – who meet every week via videoconference and quickly render a decision.</p><p>"We want to be respectful of founders' time," said Kumra, who added: "Founders want to be funded by other founders." </p><p>Barber says it is intentional that the investment committee is 50% women in an industry dominated by men. Their goal is to invest in a diverse range of founders and companies to build the next generation of great L.A. tech companies.</p><p>"People are not as jaded in L.A.," said Barber. "People genuinely want to support entrepreneurship to build a tech community."</p>
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Watch: Three Emerging Companies Pitch dot.LA Panel on Ideas to Combat the COVID-19 Crisis
Apr 09 2020
dot.LA hosted its first virtual pitch showcase on Thursday featuring three emerging companies that will have a positive impact on the current COVID-19 crisis. Founding entrepreneurs from Flowly, Shared Harvest Fund, and Meal Share talked through their business plans, shared decks, and explained their market strategy,
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Anna Barber, Managing Director at Techstars LA & Partner at The Fund and Spencer Rascoff, Co-Founder and Executive Chairman at dot.LA weighed in with their thoughts on how these companies should present themselves and ideas about how to grow their respective businesses. Stay tuned to dot.LA and sign up for our newsletter for information on the next event.</p><p class="shortcode-media shortcode-media-youtube">
<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="571022110662a6e981afd16a6ed95bc0"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/Jbv-rAnVpBQ?start=1063&rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span>
<small class="image-media media-caption" placeholder="Add Photo Caption...">dot.LA Pitch Showcase: Startups Addressing the COVID-19 Crisis</small>
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<a href="https://www.youtube.com/watch?v=Jbv-rAnVpBQ&t=1063s" target="_blank">www.youtube.com</a>
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</p><p><u><em>(<a href="https://dot.la/st/newsletters" target="_blank">Subscribe to dot.LA's daily newsletter</a> to get reminders about upcoming events)</em></u><br/></p><h2>About the Judges:</h2>
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjkwNzI4OC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyMTM2NTIxM30.pQq4vojKNaCY-ZIvYyue8bVgHtsvLcRykDmmHNflCFo/image.jpg?width=980" id="33f18" class="rm-shortcode" data-rm-shortcode-id="aa566ee2393852d6055e080aa1590b62" data-rm-shortcode-name="rebelmouse-image" />
Anna Barber is an Investor, advisor, connector and coach for founders at Techstars LA and The Fund LA.
<p><strong>Anna Barber, Managing Director <br></strong></p><p>Investor, advisor, connector and coach for founders at Techstars LA and The Fund LA. - Founder, co-founder and early employee at e-commerce, media and ed tech startups; former strategy consultant, corporate lawyer, talent manager, film producer, round-the-world traveler and outdoor adventurer.</p>
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjkwNzI4OS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzMzA2NjE2Mn0.H2J8gBjPNqRc2w0dLnSstW0f0h9zkOkFE5YkDEWFUZk/image.jpg?width=980" id="86e9f" class="rm-shortcode" data-rm-shortcode-id="f22db9dcb1d4b258af75bc4633707cd6" data-rm-shortcode-name="rebelmouse-image" />
Spencer Rascoff is the cofounder of dot.LA
<p><strong>Spencer Rascoff, Co-Founder, Executive Chairman</strong></p><p>Spencer Rascoff is an entrepreneur and company leader who co-founded Zillow, Hotwire and dot.LA, and who served as Zillow's CEO for a decade. He is currently executive chairman of dot.LA and a board member at Zillow and TripAdvisor. In fall 2019 Spencer was a Visiting Executive Professor at Harvard Business School where he co-taught the "Managing Tech Ventures" course. In 2015, Spencer co-wrote and published his first book, the New York Times' Best Seller "Zillow Talk: Rewriting the Rules of Real Estate." Spencer is the host of "Office Hours," a monthly podcast on dot.LA featuring candid conversations between prominent executives on leadership, diversity and inclusion, and startups.</p>
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