Funding

​Peloton cofounders launch DTC rug brand, raise $25M

Ernesta, a new direct-to-consumer rug brand founded by three cofounders of connected fitness company Peloton, raised $25 million in a Series A round.

The funding round was led by Addition, with participation from True Ventures, along with other investors.

Ernesta is being launched by John Foley, Hisao Kushi and Yony Feng, all of whom were cofounders of Peloton and departed the exercise hardware and media brand in recent months. Foley was the CEO of Peloton, leading the brand to become synonymous with a new generation of home fitness before being replaced by Barry McCarthy earlier this year as it sought to right itself following a falloff in demand and supply challenges coming out of the pandemic.

Now, Foley will serve as CEO of Ernesta, Kushi will serve as chief legal officer and Feng will serve as chief technology officer. They are joined by a team that includes five other veterans of Peloton, including CMO Alan Smith, COO Jamie Beck, VP of People and Business Operations Kristy Foss, VP of Product Marissa Vivori and Head of Design Eric Hwang.

Ernesta is taking aim at the rug market, which it says is currently fragmented across specialty retailers, mass retailers, designers and warehouses. In particular, it is looking to provide a curated selection of custom rugs that can fit the exact space of a residence or business.

"I've always had a passion for design, and when I noticed how confusing and overwhelming the process can be for consumers who want great style at an accessible price point, particularly in the rug category, I saw a white space in the market," said Foley, in a statement. "With Ernesta, our goal is to bring high-quality, custom rugs to a wide audience through a community-driven, curated and personal buying experience."

Ernesta plans to launch in spring 2023.

Dick’s Sporting Goods launches $50M venture fund

Dick’s Sporting Goods is launching DSG Ventures, an in-house venture fund with $50 million to invest in startups.

The fund will focus on companies that serve athletes and their communities, or help Dick's advance its efforts to work with those groups. Along with funding, Dick’s aims to provide distribution reach, industry-leading expertise in retail, operational excellence and relationship with athletes. The venture arm is also working with advisory firm VentureFuel to create a retail innovation program that will work with Dick’s Sporting Goods to pilot new ways to improve the customer experience.

Initial investments from DSG Ventures include:

• Moolah Kicks, a women's basketball performance footwear brand built "by and for" female players.
• SidelineSwap, an online marketplace for sporting goods.
• Out&Back Outdoor, a marketplace for buying and selling secondhand outdoor gear.
• EL1 Sports, a youth sports company offering baseball and softball instruction and administrative support to teams that want to stand up their own programs.
• Courtside Ventures, which partners with early-stage founders who are challenging the traditional definition of sports, gaming and wellness.

Macy's launches S.P.U.R. Pathways to support diverse entrepreneurs

Macy's partnered with Momentus Capital to launch S.P.U.R. Pathways: Shared Purpose, Unlimited Reach. The multiyear program aims to provide access to capital for retail businesses owned by diverse and underrepresented entrepreneurs.

The program aims to provide access to capital, ranging from equity funding, loans, working capital and commercial real estate. It will also provide educational resources and aim to create an ecosystem of suppliers that work with retailers. Businesses will have access to a mentorship program, an advisory network and services such as business templates, technology and software development tools.

Macy's is making an initial $30 million commitment to the program, and aims to ultimately provide up to $200 million in funding for brands and service providers, according to a news release. This will be allocated through three channels: A $20 million investment in Macy's supplier access fund, a $10 million investment that will eventually provide up to $100 million for growth-stage business and a pipeline to a Momentus Capital loan program that will provide up to $100 million to businesses at various stages.

Macy's is aiming to address longstanding racial disparities in venture funding. In 2021, startups with at least one Black founder received 1.3% of VC dollars in the US, according to Crunchbase.

"This investment will provide access to capital resources that will advance the next generation of brands and service providers," said Macy's CEO Jeff Gennette. "By investing in high-growth underrepresented businesses at all stages of growth, we intend to create meaningful economic impact within our communities, while serving our customers.”

Dropit snags $25M to unify online, in-store distribution

Dropit, a retail tech company focused on omnichannel operations, raised $25 million in Series C funding.

The funding round was led by Vault Investments, which will also be joining the company’s board. It was also supported by Tiga Investments, Axentia, Sugarbee and others.

Dropit aims to address the buildup of excess inventory for retailers – a problem which it says is hampered by the fact that retailers keep online and in-store inventory separate. The platform enables retailers to sell in-store inventory online, and turn physical stores into distribution points for last-mile delivery. It also has tools for fulfillment that help to source orders close to customers. Dropit works with brands and mall-based retailers.

"The next wave of retail will require brands to use technology to advance operational efficiency and adapt to the constantly evolving shopping habits of consumers, who have grown accustomed to the convenience provided by online shopping,” said Karin Cabili, CEO and Founder of Dropit, in a statement. “By unifying online and offline inventories, brands can reduce operational costs and minimize their impact on the environment, while simultaneously speeding up shipping times."

With the new funding round, the company plans to grow go-to-market capabilities. This includes expanding its Austin sales office, and hiring for positions across 12 states. It aims to grow the team to more than 100 people.

Peace Out Skincare scoops $20M

Acne treatment brand Peace Out Skincare received a $20 million growth investment.

The financing was led by 5th Century Partners, a private investment firm focused on economic and social impact.

It’s the first outside investment for five-year-old Peace Out Skincare, which developed an over-the-counter Acne Dot that is designed to treat breakouts overnight. With 50 million Dots sold, the treatment is the top acne brand at Sephora, according to Peace Out.

Founded by Enrico Frezza after personal struggles with existing treatments, the brand has also developed products to address dark spots, wrinkles and pores. Going forward, it is seeking to build on a foundation that champions inclusive skincare.

"This investment will enable us to expand Peace Out domestically and globally, while significantly growing our product offering,” said Frezza, in a statement. “Additionally, we will drive stronger marketing and engagement campaigns while providing clean, fun and effective easy-to-use skincare solutions to our customers.”

Vivrelle raises $35M for accessories membership club

Vivrelle, a membership club that offers a shared closet of designer handbags and accessories, raised $35 million in a Series B round.

The financing was led by 3L Capital, with participation from Origin Ventures, Chapford Capital Group and Plus Capital. The round was also supported by actresses Lily Collins and Nina Dobrev, as well as entrepreneur Morgan Stewart McGraw.

In a luxury market seeking more circular methods to provide items that are often used by customers in limited duration, Vivrelle’s platform sits between resale and rental. For a monthly fee, Vivrelle allows members to borrow designer handbags and other designer items from brands like Gucci, Cartier, YSL, Dior and Hermés.

Founded in 2018 by Blake and Wayne Geffen, the company raised a Series A round 18 months ago. It has since marked sixfold revenue growth, while staying EBITDA profitable since inception, according to the company.

“We look forward to expanding Vivrelle on many fronts, including our inventory offerings, opening additional showroom spaces and growing our hard working team,” Blake Geffen, who is the company’s CEO, said in a statement.

​ShopMy raises $8M for affiliate marketing

ShopMy, a platform that provides collaboration tools for content creators and brands to collaborate, raised $8 million in Series A funding, WWD reported.

The round was led by Granite Telecom Chief Operating Officer Rand Currier, as well as a group of private investors.

ShopMy is used by creators to manage affiliate marketing and paid sponsorship opportunities. Creators who are using the platform include Olivia Palermo, Gucci Westman, Marianna Hewitt, Stephanie Shepherd and Dr. Shereene Idriss.

The platform has already expanded its category reach, from a start in beauty to now include fashion, wellness and nutrition. With the new investment, it is aiming to build a mobile app and expand a VIP program.

Treet raises $3.5M for branded resale

Treet, which works with fashion retailers to launch branded resale programs, raised $3.5 million in seed funding.

The financing was led by First Round Capital, with participation from Bling Capital, Techstars, Interlace, Alante Ventures, BAM Ventures, and BBG Ventures, according to an announcement from the company.

Treet works with brands and retailers to set up resale platforms through their own ecommerce sites, as opposed to working through marketplace channels. Taking this route provides the ability to control floor pricing and payout options, the company said.

Working with retailers including Shein, Dôen and Boyish, Treet said it powers more than 50% of all branded resale experiences that are currently operating.

M&A

Shopify acquires Remix

Ecommerce software company Shopify acquired Remix, an open source framework for developers building user interfaces for websites and applications.

Remix is a full-stack React framework that allows developers to build web experiences, and takes care of backend server tasks that are often associated with JavaScript app development such as data loading and code splitting.

“Under Shopify’s stewardship Remix receives long-term backing and support from an established leader in commerce,” Remix CEO Michael Jackson wrote in a blog post. “This move allows us to grow faster and sharpen our focus on performance and scalability. You’ll be seeing a lot more Remix in the wild, powering some of the largest commercial sites on the web. In addition, Shopify itself will use Remix across many projects, and you can expect to see more of Shopify’s developer platform include first-class support for Remix over time.”

Initially, Remix will be applied to Hydrogen, which is Shopify’s headless commerce framework. In particular, it will address data loading, routing and error handling.

While Remix’s tools apply to web development broadly, the teams at Remix and Shopify found common ground as they began working together on Hydrogen.

“The concepts required to help commerce developers easily build fast storefronts are the same best practices codified in Remix,” wrote Shopify VP of Engineering Dion Almaer, in a blog post. “It is critical that a storefront loads fast, stays fast, and can become more dynamic the more the buyer interacts with it.”

Terms of the deal were not disclosed.

Victoria’s Secret acquires Adore Me for $400M

Victoria’s Secret acquired DTC lingerie brand Adore Me in a deal worth $400 million, as well as additional cash consideration. The deal brings together a legacy mall-based retailer that has been seeking to transform itself and a digitally native brand that stepped into space in the marketplace for an inclusive approach that was left by Victoria’s Secret’s longtime strategy of marketing to men. Adore Me’s tech-forward customer experience, including a home try-on program, was also cited as a big factor in the deal. Read The Current’s full breakdown of the deal.

Ryder acquires Dotcom Distribution

Logistics and transportation company Ryder acquired Dotcom Distribution, a provider of omnichannel fulfillment and distribution services for retail and ecommerce brands. Terms were not disclosed.

The acquisition will allow Ryder to expand its fulfillment network for ecommerce. Dotcom Distribution works with brands and retailers in health, beauty and cosmetics, and fashion and apparel. The 22-year-old company also has a 400,000-square-foot fulfillment facility that serves multiple clients in Edison, New Jersey. With the deal, CEO Maria Haggerty and Dotcom’s 100 employees will join Ryder.

It comes in the same year that Ryder acquired Whiplash, a fulfillment provider for 250 digitally native and omnichannel brands. With these deals, Ryder said its ecommerce business now delivers to 100% of the US within two days, and 60% of the US within one day.

Lowe’s sells Canadian business

Home improvement retailer Lowe’s is selling its Canadian business to private equity firm Sycamore Partners for $400 million in cash.

Lowe’s Canadian business operates 450 corporate and independent affiliate businesses, including RONA, Lowe's Canada, Réno-Dépôt and Dick's Lumber. With this move, Lowe’s is seeking to focus on growth of its US business.

"The sale of our Canadian retail business is an important step toward simplifying the Lowe's business model. While this business represents approximately 7% of our full year 2022 sales outlook, it also represents approximately 60 basis points of dilution on our full year 2022 operating margin outlook," said Lowe’s CEO Marvin R. Ellison, in a statement.

The deal is expected to close in early 2023.