Fab.com acquires Casacanda (valued at $10 million), confirms founder and CEO Roman Kirsch2012-02-20 13
In an all-stock deal valuing Casacanda at around $10 million, the U.S.based design company Fab.com Inc will acquire the Berlin-based company in what will be its first international acquisition, Casacanda founder and CEO Roman Kirsch told VentureVillage in an exclusive interview this evening.
Since its launch last September, Casacanda has acquired 250,000 members and has generated revenue in the millions. “In the next six months, we’re expecting to double the number of users,” Kirsch told us. “Unlike other European start-ups like Rocket’s Bamarang which have relied heavily on Fab replication and strict copying, Casacanda has separated itself through close relationships with local furniture designers as well as the development of features like one-click shopping.”
Kirsch emphasizes originality as well as execution. With Rocket companies like Bamarang in the competition, it’s been primarily about speed for the young design team. ”We have tremendous market know-how, an excellent track record, really good momentum,” Kirsch said, “I think that’s what Jason noticed in us.”
According to sources, Fab decided not to build its own team in Germany after meeting 23-year-old Kirsch.
According to Kirsch, the acquisition will close Monday, after which Casacanda’s website will re-launch under the Fab.de domain Tuesday. The news comes with considerable respect for 39-year-old Fab.com Chief Executive and new partner Jason Goldberg on the part of the young team. “Jason reminds me of Steve Jobs,” Kirsch told us in admiration. “Product is everything for him. Just like design for computers, he’s bringing design into the home. This is why this company is so successful. It’s his passion that impressed us a lot.”
How did the two design minds meet? “We had a couple of mutual friends,” Kirsch said. “Our relationship especially with Klaus Hommels helped to connect us. Klaus invested in Xing and also in our company.” Kirsch explained that the Casacanda team immediately felt a kinship with the innovator. “We spent a lot of time with Jason, talking about plans and exploring furniture exhibitions together. It seemed like the right fit.”
Fab’s acquisition offers the American company a portal into Europe
The expansion into Germany offers the flash-sale online store further reach into the European e-commerce market, where it is as of yet less developed than in the U.S. “The opportunity is global and we decided, ‘Let’s do this fast before the copycats come in and take what is rightfully ours,’” Goldberg told the Wall Street Journal in an interview today. Currently only 7% of Fab.com’s daily traffic comes from international users, a weak point the Casacanda acquisition is set to quickly address. The acquisition gives Fab.com, which was previously unable to ship its products outside of the U.S, a direct portal into Europe: Using Casacanda’s Berlin and Kassel warehouses, the American company will gain critical access into German and Austrian markets.
The transition also brings Fab some temporary challenges: Because the majority of European online sales occur through bank transfers, the U.S.-based company will have to build this capability into its current system. “There are definitely more challenges, but it’s what we’re signing up for,” Goldberg told the WSJ.
Kirsch is confident the partnership with “take Casacnda” to the next level.
“This is how we will succeed. At the end of the day, we’re looking to build an Amazon-sized global company.”
Kirsch, who studied at the London School of Economics as well as WHU, described the “perfect partnership” as this: “We’re getting their innovation and they’re getting our execution, business savvy and numbers background.” Kirsch’s team is top-notch, both in its business education as well as design proficiency.
“A lot about this business is about respect for designers, and that’s what a competitor like Rocket lacks. It’s always good to be original.”
Casacanda will benefit from Fab’s superlative use of social media
In a major gain for Casacanda, the Berlin-based company will begin to reap the benefit of the American company’s renowned technology platform, which will enable it to better leverage social media and mobile users in the year to come. Fab launched its Android, iPhone and iPad platforms last October and has since seen record gains, with mobile users currently accounting for a quarter of all orders, and one third of its daily traffic. About 15% of Fab’s site’s daily traffic comes from Facebook, with users sharing images of Fab.com’s products as well as strategically-placed advertisements. About 5% of the site’s traffic comes from sites like Twitter.com and Pinterest.com, Goldberg told the WSJ today.
“We’re going to use Berlin to build an Amazon-sized European company,” said Kirsch.
According to Kirsch, Casacanda’s 40 employees will all join Fab.com’s 170 global employees in name and spirit but will stick to Berlin. “We’re going to use Berlin to build a European company the size of Amazon,” Kirsch told us.
“The sky’s the limit.”
We’re just looking forward to their party tomorrow…