Jason Goldberg, co-founder of Fab.com, says his design mall was hemorrhaging $14 million a month, before they started a round of layoffs and other course changing measures.
Speaking at the Disrupt London conference, Goldberg said the decision to pivot came when it was obvious the company wasn’t raising the money they though it would.
Altogether, they raised $150 million at a $1 billion valuation, when expectations had been for $300 million.
“And when you set out to raise $300 million and you raise $150 million, you change your business model, ” Goldberg said, kind of sadly.
Last month, they launched Hem (Swedish for “home”), the new vertically integrated home furnishings business.
Goldberg has relocated to Berlin to build and run the new company. “The unique value we apply to Hem is how do you apply technology, use technology to make the process of making and selling furniture easier, ” he said. “Hem is an evolution of Fab. We realised that this was the area that showed great margins.”
And the Fab brand? Kind of quiet for now.