Warby Parker is drawing fund interest and could top $1 billion in value
March 4, 2015 05:04 PM
(Bloomberg)—Warby Parker Retail Inc., the eyeglass retailer known for its inexpensive and stylish frames, could be the latest startup to join the $1 billion club.
The company, which started as an online retailer five years ago, has been approached by funds looking to buy a stake, people with knowledge of the matter said. Those potential investors are willing to value Warby Parker at more than $1 billion, said the people, who asked not to be identified discussing private information. At that level, Warby Parker’s valuation would be about double what it received in 2013, the people said.
While Warby Parker isn’t currently holding a formal fundraising process, the demand may precipitate a new financing round that would close quickly, the people said. That interest indicates investors’ willingness to bet on the potential growth—and accept the potential risks—of a startup company in the context of a low-interest-rate environment.
A representative for Warby Parker declined to comment.
Warby Parker would join a growing class of private companies with valuations of $1 billion or more. According to data by CB Insights, a research firm in New York, 54 VC-backed startups reached that threshold in the past two years. It is also among a handful of New York-based startups that have attracted millions in private capital, including e-commerce sites Gilt Groupe Inc., No. 59 on the Internet Retailer 2014 Top 500 Guide, and Etsy Inc., No. 30.
Founded by Neil Blumenthal and Dave Gilboa, who wanted to find a way to provide relatively affordable, stylish eyeglasses and sunglasses, Warby Parker started online and then migrated to bricks-and-mortar, with its glasses now sold in 18 locations across the U.S.
The eyeglass industry has traditionally been controlled by a few large players, led by Italy’s Luxottica Group SpA, owner of the Ray-Ban brand and of retail chain LensCrafters. Luxottica has annual sales of more than $10 billion, and a market value of 26 billion euros ($29 billion).
Warby Parker competes by offering its frames for as little as $95 each. The company also donates a portion of its sales to nonprofits that provide glasses to low-income communities. It’s qualified as a B Corporation, a certification that requires it to hold itself accountable for these commitments.
The company is backed by Mickey Drexler, the chairman and CEO of J. Crew Group Inc., No. 60 in the Top 500 Guide, as well as American Express Co., according to venture capital database CrunchBase. The company also counts Spark Capital, General Catalyst Partners and Tiger Global Management as investors, the database shows.