Yesterday Lesara announced that Mangrove had lead their Series-A round of financing. Our firm is delighted to be involved with serial entrepreneur Roman Kirsch, founder of Casacanda, which he sold to FAB in 2012.
Lesara, based in Berlin, is an online budget retailer, which aims to disrupt the European budget retail market and compete directly with giants such as C&A, Tesco, Aldi and Lidl. No question that Roman and his team are aiming high and we look forward to helping shake up the industry on a journey to greatness.
When we first met Roman, we were immediately drawn to his thesis: "offering good value for money” to his customers. While this seemed like an obvious statement, we quickly realized that most e-commerce companies had been focussing on the high-end of the market, forgetting the massive "budget" market. With this in mind, our team started seriously looking at Lesara. Here is what got us excited:
1. Roman had a laser focussed vision. He wanted his company to focus on "value for money", not discounts, not good deals, not brands. How many times did we hear "value for money is the single most relevant driver"?
2. Despite a budget shopping positioning resulting in low basket sizes, margins are chunky. This drives tremendous unit economics. Rarely have we seen such good unit economics from the get go.
3. The company focussed on non-branded products. Every day it proposes a different, rolling selection of basic, classical, non-branded products. Combine this with a "budget" positioning and customers are "drawn back" with a frequency unlike most traditional e-commerce companies.
4. The company targets a very specific demographic: women aged 25 to 40 years old with families. We absolutely love this focus. Understand and building an offering for a specific demographic allows a company to focus and build the best offering possible.
5. Roman's understanding of his KPIs. Having previously been successful with Casacanda and lived through some of the FAB debacles, he was able to clearly articulate what he needed to focus on in terms of business KPIs: customer profitability at the first order, low/flexile inventory, positive cash-flow and chunky margins.
My partner David will sit on the company's board and bring Mangrove's e-commerce experience and "out of the box" thinking to the table. He will also be the company's greatest cheerleader. Our team is excited and we look forward to the journey…..
* This post was first published on LinkedIn