Online fashion player Lyst has big ambitions.
The London-based platform, which aggregates millions of products from brands, department stores and boutiques into a virtual one-stop search-engine-meets-shopping mall, has raised $85 million in a funding round that lays the groundwork for a public listing.
Its goal, according to chief executive and founder Chris Morton, is to build a leading position in the fast-growing, highly competitive and still maturing online fashion market.
Lyst is jostling for the position alongside platforms like Farfetch and MyTheresa, as the pandemic has fuelled rapid growth in online fashion sales and heated interest in the market.
“A lot of folks are enjoying that tailwind,” Morton said in an interview. Lyst has grown rapidly, too. Revenue rose 26 percent to hit £23 million ($32 million) in its financial year ending March 31, 2020, according to a public filing with Companies House. Though Lyst isn’t profitable, it boasts 150 million users and gross merchandise value, a measure of total sales volume, hit $500 million last year. The business takes what Morton described as a “low double-digit” commission on sales. “We’re on a good path to being a category leader,” Morton said.
Lyst is planning to use its new funding to grow its audience, with a focus on Europe and the US. It’s also focusing on building its brand, which remains a weakness for the company, with plans to triple its marketing budget. And it will invest in technology to deliver a more personalised shopping experience, much like Spotify does for music. Key to this strategy is the company’s app, which relaunched in 2019 and has enjoyed rapid growth, Morton said.
“This is not the utilitarian world of Amazon. People love browsing because it’s fun, it’s entertaining,” Morton said. “Conversion and key purchase rate on the app is so much higher than anything else we’ve seen.”
Lyst is also looking at boosting its profile with more content, building on its regular Lyst Index, an often-quoted quarterly trend report. The idea is to build something like a Billboard music chart, but for fashion, Morton said.
Lyst’s $85 million pre-IPO funding round attracted investors including Fidelity International and C4 Ventures, coming in alongside existing investors like LVMH, Balderton Capital and Draper Esprit. Entrepreneur Carmen Busquets increased her investment in the company.
The company did not disclose the valuation at which it secured the financing, or the planned timing for a public listing.
Lyst also bolstered its executive team, hiring former Spotify executive Mateo Rando as chief product officer and elevating chief people officer and general counsel Emma McFerran to the board and the position of chief operating officer.
Editors’ Note: This story was updated on 12 May 2021 to include comments from Lyst CEO and founder Chris Morton and additional context. It was updated a second time to add financial details.
Disclosure: Carmen Busquets and LVMH are part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders’ documentation guaranteeing BoF’s complete editorial independence.
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