Flash Sale Site Totsy Plans to Use New Funds to Reach More Customers

The crowded field of private flash sale websites makes it hard to stand out, but New York’s Totsy plans to get ahead of the pack by focusing on parents looking for deals on baby products and other wares. The two-and-a-half-year-old company announced today it has raised $18.5 million in Series B funding led by previous investor Rho Capital Partners. DFJ Gotham Ventures, another prior investor, also participated in the round. Totsy raised $5 million in a Series A round in 2010. The latest funding, Totsy CEO and co-founder Guillaume Gauthereau says, puts the startup closer to break even and gives it more resources to help the company grow.

Totsy runs flash sales on its site for up to 72 hours aimed at its invite-only members (signing up is free) looking for deals on products for infants, kids, and parents. The items include baby and children’s clothing, bedding, toys, and prenatal care products from brands that include Ed Hardy Kids, children’s apparel maker Vive La Fete, and Disney.

Gauthereau says mothers and moms-to-be are his website’s core customers. As families grow, he says he sees more opportunities to expand the company’s current client base of some three million active users. “There are 350,000 new births every month in this country,” he says. “That’s almost 4 million moms.” The company plans, according to Gauthereau, to spend “a good chunk” of its latest funding on getting the word out to new moms about the website. Totsy already has partnerships to reach the audiences on family and parent-oriented websites such as What to Expect and Parenting. Funding will also go towards increasing the company’s operational capacity.

Totsy’s flash sales are typically centered on specific brands and offer discounts of as much as 90 percent off retail prices. The brands ship the products to Totsy’s warehouse and then the items are delivered to its customers. In addition to its New York offices, Totsy maintains a logistics center and photo studio (for shooting products) in Edison, NJ.

Totsy is not the only player chasing this segment, however. Zulily in Seattle also … Next Page »

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