A Fab.com IPO Might Cure the Facebook Syndrome

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Facebook's (NASDAQ:FB) IPO dud changed the game for startups trying to raise money in public markets. 

Investors are much more cautious, requiring startups to have seemingly impossible numbers and an established track record of success.

But some startups are moving along quite nicely, despite the "Facebook syndrome."

Enter Fab.com.

This startup is a deal sight for design – customers can buy unique, hand-picked items such as home furnishings, artwork, fashion items, gourmet foods, and much more.  The company smoothly integrates social media to get more consumer eyeballs on its products.

Co-founder Jason Goldberg recently discussed new directions for Fab.com in a blog post.

Whereas Fab used to rely heavily on flash deals showcasing outside suppliers, it is now shifting into exclusive offerings and retail stores that reside regularly on the website.  It's also pushing to expand overseas.

Indeed, Fab's growth has been astonishing. The site now has 14 million members and continues to increase its membership rapidly.

In Fab's last round of financing at the end of 2012, it was valued at around $600 million.

Sound like a lot? Well, reports now indicate Fab has already reached a $1 billion valuation

Past investors include celebrities Ashton Kutcher and Guy Oseary, and a variety of well known private investors and VC firms such as Andreessen Horowitz, First Round Capital, and SoftTech VC.  

In June, thriving Chinese internet giant Tencent invested an undisclosed amount.

Interestingly, back in 2012 Fab was seeking funding at a lower valuation than it had planned because of the Facebook syndrome.

So, if Fab ends up being hugely successful IPO, then companies sitting on the IPO fence just might join the dance this year.

Despite the bearish attitude of investors toward IPOs since the Facebook syndrome, Fab would be in good company if it does decide to go public.

A few recent IPOs have shocked Wall Street, like Noodles & Company (NASDAQ:NDLS).

Noodles' pasta-heavy restaurant chain more than doubled its initial public offering price last week.  It had raised $97.2 million in its offering, and is now valued by the market at more than $800 million.

Fab.com isn't Ashton Kutcher's only investment.  See what other companies the surprisingly savvy venture capitalist likes here…


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  1. David | July 3, 2013

    There is no fab.com growth over the past year, in fact their sales are down from this period last year. And look at their Alexa ranking, it's dropping like a stone.

    http://www.alexa.com/siteinfo/fab.com

    And the 14 million users is a myth, 13.9 million of those only have visited one time.

    • Tara Clarke | July 3, 2013

      David, thanks for your response. That is interesting information!

      Investments for Fab are still pouring in as of June, and the $1 billion valuation is very recent. Maybe the sales are down as Fab transitions from daily deals to more traditional retail?

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