Fab.com, the New York-based e-commerce startup founded by former Jobster CEO Jason Goldberg, has sold to custom manufacturing company PCH.
The terms of the deal were not disclosed, though TechCrunch reported that the acquisition was “much higher” than the $15 million it originally placed on the deal a few weeks ago.
Even so, anywhere in that ballpark, would be a less than ideal outcome, given that Fab.com raised a whopping $330 million, and once was valued at more than $1 billion. Backers included Andreessen Horowitz, Mayfield Field, First Round Capital and others.
Goldberg previously led Seattle-based Jobster, an online jobs and recruiting company that also fell on tough times and sold for a fraction of the money it raised. In an interview with Kevin Rose of Digg four years ago, Goldberg said that he learned his lessons from that past failure.
“I made every mistake in the book,” said Goldberg. “I … basically got educated on that $48 million on how to start companies.”
Given the outcome at Fab.com, it appears as if it took a few hundred million more.
As part of the acquisition, 35 employees from Fab.com will join PCH. Goldberg will leave the company, with general manager Renee Wong leading the day-to-day business. It once employed about 700 workers, and was burning through $12 million per month.
Goldberg will continue to focus his efforts on Hem, a modern furniture retailer which spun out of Fab.com. As part of today’s deal, Hem will own shares in PCH.
“All of the funds raised from the transaction will be reinvested into Hem,” Goldberg wrote in a blog post, noting that Hem is well financed and on solid ground.
Known as being brash and outspoken, Goldberg once challenged recruiters to try to poach his staff at Fab.
“We believe that we are building the best company in the world to work for. But, in the end, everyone has a choice as to where they want to work,” Goldberg wrote. “We want people who choose Fab.com. Fab.com is a career lifestyle decision. We’re confident about our ability to attract and retain the best. May the best team win. (And ours is awesome!)”
PCH founder Liam Casey said they are looking forward to rebuilding the Fab brand, and the company noted that the Fab organization is now a “smarter” and more “efficient” organization under the direction of Wong.
“We love the brand, the customer experience, and the focus on lifestyle products,” said Casey. “We see an opportunity to reinvigorate the Fab audience – keeping the current focus, and adding a variety of more distinct and exclusive goods from designers. And because Fab has a flexible and dynamic technology platform, we have a good foundation to test new selling modes that will excite customers.”
In recent months, Fab.com competed with Seattle-based Zulily, the flash sale site that has expanded into home decor products. Will that competition continue with PCH?
It will be interesting to watch, since PCH — an Irish company with its U.S. headquarters in San Francisco —posted more than $1 billion in revenue last year.
In the release, Casey said that they will look to work with up-and-coming third-party brands and designers, giving them a platform to sell their wares on Fab.com.
“We will experiment with emerging ecommerce strategies that stimulate demand by offering a limited number of exclusive, on-demand products in a narrow window,” Casey said.
Sounds a bit like Zulily, no?
The difference is that PCH specializes in manufacturing products, with logistics, operations and manufacturing facilities in China. Shares of Zulily, meanwhile, continue to sink with the stock trading around $14 per share, well below its IPO price and down 78 percent in the past year.