Zulily CEO Darrell Cavens in front of the company's expanding employee photo wall

Plopped in the middle of Zulily’s Seattle office is a colorful cardboard rocket ship marking the entrance to the company’s HR and recruiting department. It’s a popular destination.

The daily deal site for baby and children’s products has already outgrown three office buildings and mushroomed from two co-founders to 240 employees since it was founded 22 months ago. And now Zulily is putting a little extra rocket fuel in the tank.

Zulily today is announcing a whopping $43 million venture capital round led by Meritech Capital Partners, the same folks who scored big when Seattle’s PopCap Games sold to Electronic Arts for up to $1.3 billion. Total funding in Zulily now stands at $53.6 million.

Meritech, along with existing investors such as Maveron and August Capital, obviously think that Zulily has what it takes to become the next big consumer Internet brand in Seattle. A source tells GeekWire that the valuation on the company in the most recent round was about $750 million.

A cardboard rocket ship marks the entrance to Zulily's HR department

That’s a jaw-dropping number, topping the market value of publicly-traded Seattle tech companies such as RealNetworks, InfoSpace and Blue Nile. It would also put Zulily in the ballpark of Zillow, which went public last month and is now valued at $736 million.

Zulily CEO Darrell Cavens, who co-founded the company with former Blue Nile CEO Mark Vadon, declined to discuss the valuation. But the 38-year-old father of two tells GeekWire that the company is “very pleased” with how things work out. As a result of the deal, Meritech Capital’s Craig Sherman (no relation to Seattle attorney Craig Sherman) is joining the board.

“When you’ve got a solid business with real revenues and growth, I think there is money willing to invest in that,” Cavens tells GeekWire. “From day one, we’ve had the vision of building a real retailer focused on driving revenues, driving engagement, driving member growth. And all of those things are the foundations of a great business.”

Cavens declined to provide specifics on the company’s financial metrics, but a source says that Zulily is on a path to do more than $150 million in revenue this year.

That’s an absolutely astonishing growth curve, considering the company wasn’t in business two years ago. And it’s even more impressive giving that Zulily, amazingly, has been able to fly under the radar even as daily deal sites like Groupon, Living Social and Gilt Groupe grab headlines.

“We are not out looking to see our names in print necessarily, as much as we are trying to build a great business,” says Cavens.

A Zulily employee prepares maternity clothes for an upcoming photo shoot

But there’s one group of folks who’ve certainly discovered Zulily. And that’s Internet-savvy moms.

Zulily’s morning email blast — containing massive discounts on everything from toys to books to baby clothes — now goes out to four million members. That’s up from just over a million members last October, Cavens says.

Unlike some daily deal sites where vendors struggle to get repeat business once the coupon fades away, Cavens noted that baby and children’s products are a bit different. That’s because parents often fall in love with a specific brand, returning for repeat orders on other gear or recommending the items to friends.

Cavens has seen that behavior manifest itself on Zulily, telling the story of one woman who said she substituted her daily newspaper habit for Zulily’s morning emails.

Visitors to the company’s new 80,000 square foot office space — located in a four-story brick office building just south of Safeco Field — are struck by a couple things.

First, is the ever-expanding employee photo wall which features headshots of every employee (a throw-back idea to Cavens’ time at Starwave where he worked in the late 90s). The photo spread has now consumed the better part of the wall, and some placards are absent a photo. (Presumably because the company has yet to keep up with its amazing growth).

Secondly, is the wide open space, complete with photo studio and production area. In some respects, the Zulily offices look more like a fashion studio than a technology office. (A photo studio includes a small Thomas the Train toy and baby models are frequently seen being carried in their mother’s arms in the offices).

And those offices are about to get a little more crowded. Cavens notes that the new financing will be used to accelerate growth, with much of the cash going to hiring of new employees.

Even as the company undergoes hypergrowth, Cavens says that the mission remains the same.

“We feel like we can be the best in the world at being the children’s retailer of choice for these moms,” said Cavens. “The kids’ market in the U.S. is close to a $60 billion category, so that little niche is bigger than most other retail categories.”

Follow-up: Zulily CEO Darrell Cavens talks to GeekWire about competition in the daily deal space; his strategies for growing the business on “Zulily time” and more. Read the entire interview here.

Comments

  • http://blog.redfin.com GlennKelman

    Congrats to the entire Zulily team; this is the fastest-growing business in Seattle history and it has been remarkably capital efficient and very humble. 

    • Zulilyvictim

      Zulily so cleverly rips off the suppliers.

      • http://www.zulily.com zulily

        Sorry to hear that you feel victimized. Our business relies on building great partnerships with our suppliers and focusing on customer satisfaction. If we failed to live up to those expectations, we’d like to understand why and work to change it. Please give our customer service team a call at 1-877-779-5615, so they can connect you with the right person. 

        • http://twitter.com/spencerrascoff Spencer Rascoff

          Hi,
          Traveling on business all week. Might be slow on email.

          Thank you,
          Spencer

  • http://www.thoughtful.co Chris Lynch

    Congrats to Darrell and the team!

  • http://www.chicago.brownhub.com Brown Hub

    I must say congrats to all members because you guys proof that  for business settlement you can achieve any goal with their team and hard working. 

  • Anonymous

    That dude does indeed make a LOT of sense.

    real-anonymity.us.tc

  • Anonymous

    Darrell, Mark and the Zulily team are building a Seattle ecommerce company we can all be proud of.  Congrats and we’re rooting you on.

  • http://blog.calbucci.com/ Marcelo Calbucci

    As I heard on an interview at Mixergy not long ago “There is no group of people more ‘viral’ than moms”. It’s absolutely true and Zulily is just reaping the benefits of that population with a great execution. Congrats!

  • http://twitter.com/spencerrascoff Spencer Rascoff

    Huge congrats to Mark and the team. Great to see a Seattle company growing so quickly.

  • Cstolting

    I can only wish I was a part of this..!! Beautiful work.

  • Gayle

    I think there are a lot of us grandmas in the buying group as well!!  Love the change in the shipping policy–great move.

  • Marty Marcus Liao

    Well, ordered a birthday hat for my grandson on Sep’t. 8 and I was told the hat will be at my grandson’s home in Fl. before his Oct.2 birthday.  Hat did not arrive on time. Although I got a refund and was helped by very nice customer service people (Kevin W. in particular), my e.mail to Mr. Darrell Cavens remains not answered or acknowledged.

    Regards,
    amcandgmatoo@yahoo.com(Berkeley,Ca.)

    • http://www.zulily.com zulily

      Glad that Kevin was able to help. Rest assured that Darrell does review feedback emails. He is able to respond individually to emails, but does value customer input and suggestions for how zulily can grow and improve.

  • JunieNYC

    after 3 weeks still no shipment? wow, good luck zulily. we sure won’t purchase from you ever again. 

    • http://www.zulily.com zulily

      JunieNYC,

      Sorry to hear that you were waiting for an order. Improving shipping times is a top priority for us as we grow. Because we want our customers to have a great experience when ordering from zulily, our customer service team is always available to address your concerns. Please give them a call at 1-877-779-5615.

  • Pat Reader

    Zulily is a scam. i received my order and I am very dissatisfied {i sent another order to my granddaughters and their complaint is the same].  I think you are an outlet for goods shipped directly from China.  The quality is just awful.  I am embarrassed to leave at the thrift store, let alone to give as a gift. I truly overpaid.Even though your site indicates items will be shipped by a certain date, shipping was very slow -another reason i think goods come directly from China.  I guess that’s also why you don’t take returns/refunds.I will complain to every complaint board i can until your site closes.  shame on you!  if you want to sell overpriced cheap goods, then advertise as such. Shame on you for deceiving people.

    • http://www.zulily.com zulily

      Pat, we are sorry to hear that you are unsatisfied with the quality of your order. 

      We work to ensure zulily customers have a great experience from start-to-finish when shopping on our site. Our customer service team will gladly work with you to address your concerns and make sure that your feedback is shared within our organization. Customer service is available at 877-779-5615 or by submitting a request here: http://www.zulily.com/index.ph…

      We are different from a standard online retailer. We work closely with many different vendors to host sales events on our site. When one of our 72-hour sales events ends, the vendor ships to us and we then ship to you. This does add additional time to our fulfillment process, but we are always working to improve shipping times and the shopping experience. Information about the brands we feature, including product features and origin, are listed in each sales event for you to review.

      We value your feedback and, as our reps are unable to reach out to you personally without contact information, we hope that you will give us a call or send a contact email very soon.

      • http://twitter.com/spencerrascoff Spencer Rascoff

        Hi,
        Traveling on business all week. Might be slow on email.

        Thank you,
        Spencer

      • Preader7

        Thank you for my prompt  refund.  I am happy to say that Zulily stood behind their policy and refunded my money because I was so dissatisfied with the quality of the merchandise I ordered. They also refunded the shipping charge.  Kudos to Zulily for customer service. Thank You!

  • HEFFERBNANS

    This company takes weeks and months to send out what you ordered.  They take your money immediately….then no product.  I would never have bought Christmas gifts 3 weeks before Christmas if I thought I would NOT receive.  THEY ARE REALLY BAD !!!

  • HEFFERBNANS

    This company takes weeks and months to send out what you ordered.  They take your money immediately….then no product.  I would never have bought Christmas gifts 3 weeks before Christmas if I thought I would NOT receive.  THEY ARE REALLY BAD !!!

  • Guest

    DO NOT USE THIS COMPANY!!!! Very poor service. They do not ship within the time frame they promise and when you try to cancel your order, they send it anyway so that you must pay. Products can be found cheaper elsewhere. Actual products pretty cheap in quality.

    • http://www.zulily.com zulily

      This sounds out of the ordinary, as we do always work with customers to make sure they are happy with their zulily shopping experience and products. We also carefully monitor pricing and item quality. Our customer service team will gladly work with you to address your concerns. Please give them a call at 1-877-779-5615 or send a request here: http://www.zulily.com/index.php/contacts

  • Guest

    DO NOT USE THIS COMPANY!!!! Very poor service. They do not ship within the time frame they promise and when you try to cancel your order, they send it anyway so that you must pay. Products can be found cheaper elsewhere. Actual products pretty cheap in quality.

  • Nursingwannabe

    Worst company to order from. I can not believe I recommended them to so many of my family and friends. I have ordered over 1000.00 worth of merchandise for my 2 girls and my new home. Some of my orders were placed up to 32 days ago. Nobody has contacted me. I’m out money with nothing to show. SCAM!!! DO NOT ORDER FROM THIS COMPANY. Also no response to the email I sent. I’m calling pay pal and having my money refunded.  

  • Guest

    If you notice the similar syntax and use OF CAPITAL LETTERS WITH EXCLAMATION POINTS!!!!!! You would almost think one person is making a couple different logins for their personal vendetta on zulily.

  • Preader7

    Thank you Zulily for a prompt refund on merchandise that was not the quality I expected.  Everyone I spoke to was professional, polite and helpful! So happy to see you want to make your company a star. You have renewed my faith on new online companies! Thank you. 

  • T. Britt

    First time ever placing an order from Zulily .Placed order on Sept.13th and have called and talked to 5 different people what is going on with this order and have had five different stories ..Now the order is stuck in customs but they say it will be shipped to me by Wednesday I highly doubt that .This will also be my last time ordering from them Never ever again .

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