Deal Radar 2008: Girls Like Stardoll

Stardoll.com, formerly known as Paperdoll Heaven, is an online community for girls aged between 9 and17. It is a free online version of dress up dolls and is meant for those in love with fashion and style. The site features over 330 dolls and tens of thousands of virtual garments and accessories. It is now the No. 1 site for girls aged 9 to 17, according to comScore.

Key attractions include the ability to dress up celebrities and network with others. The MeDoll feature allows users to create a personalized doll that they can dress with merchandise from a virtual shop in its virtual galleria, the “starplaza.”

Stardoll.com has over 6 million unique visitors per month and registered users from over 200 countries. It is adding over 20,000 new members everyday and has above 10 million registered users. It is headquartered in Stockholm and has operations in Finland.

The site earns revenues from advertising. It also earns revenues from products offered by various companies in its virtual shop, bought and sold with StarDollars. The site sells between 60,000 to 180,000 items per day. Advertisers on Stardoll include major fashion brands like Donna Karan, LVMH and Sephora.

In June 2006, Stardoll raised $6 million in Series B funding from Sequoia Capital and Index Ventures. Earlier it had raised $4 million in Series A funding from Index Ventures and angel investors. They seem to have done remarkably well so far with only $10 Million.

Stardoll is a good acquisition target for companies that are targeting kids or teens, Walt Disney and Viacom being the top contenders. Yahoo is also a contender, trying to fill its gaping hole in the teen category. Another possibility is iVillage, a women-focused site that may want to catch the girls before they become women. Condenast, with its interest in Fashion, may also be also a logical acquirer.

My interest in Stardoll stems from the fact that pre-teens and teens directly and indirectly control billions of dollars in purchasing power, and Stardoll seems to have cracked the code on how to hook the girls.

It makes perfect intuitive sense – that girls would want to play with dolls and fashion – something I certainly enjoyed as a child. Number of users, therefore, will likely double this year, building an incredibly powerful community that the fashion industry needs to learn to leverage.

This segment is a part in the series : Deal Radar 2008