How Summit could bring some class to Rocket’s Westwing

When you’re a big operation like Rocket Internet, you try a lot of things at once and see what sticks. And while attempts such as Pinspire have the whiff of failure about them, other Rocket firms such as Munich-based Westwing are doing very well indeed.
The site is one of those flash-sale shopping clubs that were rare a year ago, but took off after pivoted midway through 2011. Concentrating on the ‘home and living’ segment, Westwing was only founded in August last year, but it already boasts three million members in more than a dozen countries (including several where it trades as Dalani).
Sales have increased tenfold in the last five months, the company claims. That’s an impressive performance, and it’s now got some serious validation: with $32m of funding already in the bank, Westwing has announced that it’s picked up a further $50m, with existing investors such as Rocket, Access Industries, Holtzbrinck Ventures and Investment AB Kinnevik being joined by round-leader Summit Partners.
Summit knows this segment well, having been an investor in Vente Privée, the French company that kicked off the whole flash-sale shopping club thing before anyone else realized it was a good idea.
And with this extra cash, Westwing looks set to do what Rocket firms do best — expand like crazy.

“We are dedicated to building one of the largest e-commerce retailers in the emerging home décor and furnishing market on an international scale,” Westwing CEO Stefan Smalla said. “With this new capital, we will accelerate our rapid growth, scale operations in each of our countries.”

As we’ve pointed out before, the genius of Rocket’s approach is in creating an international distribution network that can support any number of new e-commerce models that are plonked on top of it — so now that Rocket is up and running in Brazil, for example, it can roll out new ideas in that country very quickly.
But making those new models attractive and ‘sticky’ is another matter. Zappos clones like Zalando are relatively easy to make work, being more about margins and distribution than anything else, but flash-sale outfits like Westwing need to have a certain class and character that makes them stand out.
Which is no doubt why Smalla noted that Westwing would “benefit from [Summit’s] substantial experience” – a prime example, if ever there was one, of investors bringing a lot more than money to the table.