Social commerce site Little Black Bag raised $8 million in its second round of financing.
Little Black Bag infuses online shopping with an aura of mystery. Rather than scrolling through endless images of products, shoppers answer a series of style questions and receive a personalized mystery bag filled with brand name fashion and beauty products. They can then trade items online with other women until they have assembled their ideal collection.
The exchange factor adds in a gaming component to shopping on Little Black Bag. Over one million trades occur per month. The ability to swap items creates interaction between users that not only drives engagement on the site, but also drives consumer engagement with brands.
The products on the site are circulated, as women send and accept trades. This heightens the visibility for each product and puts goods in front of new customers. CEO Dan Murillo said in a statement that LBB generates over 10 million peer-to-peer brand impressions per month across social media networks, which makes it a powerful marketing platform.
Users purchase their bag for either a $49.95 or $59.95 monthly subscription, and if they do not like their selection, can trade until satisfied. Little Black Bag makes money off of the resale margin.
The concept was inspired by the Japanese idea of “fukubukuro”, a bag filled with unknown random contents. Building off this idea, Little Black Bag launched in January of 2012 and received $2.75 million from GRP, DCM Chamath Palihapitiya, Tim Kendall, and David Tisch in February.
This second round was also led by GRP Partners, with participation from DCM and brings the total raise to $10.75 million. The money will go towards expanding the marketing and merchandising teams, acquiring more users, adding more brands, and developing the products.
Little Black Bag is based in Los Angeles.
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