Stitch Fix sews up $12M to personalize online retail with data and human stylists

Stitch Fix, an online shopping startup that gives women access to affordable personal stylists, has raised $12 million. The Series B round was led by Benchmark Capital and follows $4.75 million previously raised. As part of the deal, Benchmark investor Bill Gurley will join the startup’s board.

The San Francisco startup was launched in 2011 as a recommendation-based retail channel. Users provide their general size and style preferences and the startup’s stylists handpick five items (or create a “fix”) to send to the shopper. Offline, personal shopping services come with big price tags. But on Stitch a Fix, the styling fee is $20 a month (which is applied as credit toward any item purchased) and the average item costs $60.

“It’s a totally different way to think about how retail works,” said founder and CEO Katrina Lake. “It starts and ends with consumer preferences.”

Lake said the startup wasn’t necessarily looking to raise money, but Gurley reached out after learning about the company through others at Benchmark. Given his experience with consumer startups and retail (he was an early investor in Nordstrom), Lake said they couldn’t pass up the opportunity to work with him and have him join the startup’s board.

SF2She said the financing also comes on the heels of significant growth and will help the company scale and build out its team. While the startup declined to share specific user or engagement numbers, Lake said its customer base has grown five-fold since February and that 70 percent of users will get a second “fix” within 90 days of their first.

Other e-commerce startups out there offer elements of Stitch Fix’s service. JustFab, Keaton Row and Trunk Club, for example, work with personal stylists to select boxes of items for their customers to try at home. What I find particularly interesting about Stitch Fix is how it pairs data with its styling services. Lake said each garment that comes into Stitch Fix is coded across 100 different variables. And the startup isn’t just tagging items according to style and category; it’s looking very closely at how the items could actually fit its customer. What matters, Lake said, isn’t just the length of a dress or its designer, but “that this dress will not fit over a D cup.”

As stylists pick their items for customers, Lake said, they use the company’s data and algorithms about clothing and consumer preferences as “guardrails.” That data also informs designs that the company manufactures through its own label, 41Hawthorne. For example, when it learned that women were looking for work-appropriate dresses with slightly longer hemlines, the company started making them themselves.

In addition to the funding, the company said it had added several new hires, including Lisa Bougie, former general manager of emerging markets for Nike, who joins as chief merchandizing officer, and Jennifer Olsen, former chief marketing officer at Crate & Barrel, who joins as chief marketing officer. We’ll be highlighting design-centric emotional e-commerce at our RoadMap conference on November 5th and 6th in San Francisco.