Want it, need it, love it -- no longer just a phrase associated with material girls who have watched one too many teen movies, but the battle cry of an ecommerce startup looking to democratize online shopping.
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Where ecommerce giants like Amazon (NYSE:AMZN) and eBay (NASDAQ:EBAY) excel at providing a wide variety of products, sites like ModCloth.com and Birchbox thrive by focusing on niche markets.
And falling somewhere in the middle is Wanelo -- a mash up of “want, need, love” -- which launched in 2010, looks something like Pinterest and functions like Twitter, but is 100% focused on products. And its founder says that is what sets it apart.
“The state of social commerce is somewhat noisy,” Founder and CEO Deena Varshavskaya tells FOXBusiness.com. “We are very unique as a social network in that our content is directly monetizable.”
The site had 8 million registered users as of May 2013, up from 1 million in November 2012. Varshavskaya says the goal is to unite shoppers, products and stores on one platform where they actually interact, creating a social shopping experience under a digital backdrop.
How It Works
Wanelo aims to help consumers organize and keep track of products and favorite brands.
[Wanelo] creates an endless exploration experience and extreme utility for our shoppers.
Once signed up, users create profiles and pick from a bevy of already-registered brands and individuals to follow, such as Varshavskaya herself. A Pinterest-like stream full of trending items greets users upon login. These items, like all other products posted on the site, are directly traceable back to a respective retailer where they are available for purchase. Users have access to the feeds of brands and other users, giving them a glimpse of what others are currently “wanting, needing and loving.”
“Wanelo is essentially a universal wish list,” Varshavskaya says. “It creates an endless exploration experience and extreme utility for our shoppers.”
The site is seeing “extreme engagement” in its analytics, according to Varshavskaya. The team’s favorite metric is tweets per minute (the average is about 60 tweets per minute lately). Products listed come from over 200,000 stores -- major retailers and small boutiques alike.
Wanelo received an initial $3 million in seed funding from Floodgate, First Round Capital, Forerunner Ventures, Naval Ravikant and other angel investors. The company received $11 million in its latest round of funding, pushing its valuation above the $100 million mark, according to a person familiar with the matter.
And TechCrunch’s Alexia Tsotsis says: “Everybody wanted in on this deal: I’m hearing that VCs were literally begging for intros to Wanelo founder Deena Varshavskaya, and among the very interested was Sequoia.”
Indeed, investors are talking.
Sergio Monsalve, a partner at Northwest Venture Partners, says Wanelo is intriguing because of how it harnesses the “power of the Internet” and the “power of the community” -- a growing trend in companies that are really taking off, such as ModCloth.com -- which NVP backs.
“An ecommerce site that creates awareness, activates the consumer, becoming as addictive and successful as future contenders, and thereby amplifying their presence is very interesting to me,” says Monsalve.
(Potential) Hurdles Ahead Wanelo’s current money-making model involves an affiliate “fee,” meaning they receive a cut of the money retailers make on sales made via the site. While that works well at the moment, Varshavskaya admits it is a temporary strategy and says the company is working on developing a sustainable alternative going forward. (She declined to disclose details at this point on the works in process.)
And as shoppers in the U.S. continue flocking to digital stores, the number of consumers turning to mobile apps is also increasing. More than 60% of consumers are accessing the ecommerce world from their phones and tablets, according to Anindya Ghose, co-director of the Center for Business Analytics and professor at NYU Stern School of Business.
Wanelo sees this challenge as an opportunity to grow its audience and secure a spot in shoppers’ browser favorites. As per Ghose, it’s a “mobile intensive world” where apps are the next frontier for ecommerce.
“Retailers who can invest in apps for mobile users are more likely to see users stick to the platform and lock them into using it,” Ghose tells FOXBusiness.com.
80% of Wanelo’s users are on mobile apps, both iOS and Android, alone, according to Varshavskaya.
But if individual stores jump on the mobile app bandwagon, third party ecommerce sites might become irrelevant. Ghose sees it differently.
“Bargain shoppers will likely seek deals on third party sites, and a site like Wanelo reduces our search costs by letting people choose products for us,” Ghose says. “Plus, its online community format satisfies the basic human need to socialize.”