Building a Fashion Accessories Marketplace from London: Kiyan Foroughi, CEO of Boticca (Part 4)

Sramana Mitra: What levels were you able to get to before you raised the convertible notes? There were actually transactions happening on your site?

Kiyan Foroughi: There were transactions happening but we’re talking about single digits daily before the convertible notes. It was still very early. We started seeing more traction, and I can talk about it later as we get to it, down the line.

Sramana Mitra: £250,000 in convertible debt from whom?

Kiyan Foroughi: These were mostly business friends and mentors. I don’t want to say they were friends and family because we didn’t really have any friends and family in there. They were mostly people we knew from the industry. To give you an example, my old bosses at TA invested in the business. Some people were introduced to us like the Head of Digital at Burberry at that time. It was all business angels. These were industry people who we either knew or were introduced to us.

Sramana Mitra: What did you do with the £250,000 cash infusion? What were you able to accomplish?

Kiyan Foroughi: We used this for about six to eight months. It was primarily to do two things. There was the first phase, which was to get a beta version of the site out because the alpha version that I got out needed some work. We needed to improve things on the conversion funnel and search routes. We hired a couple of developers in-house. As I mentioned to you, I launched it first on my own with an agency. We wanted to bring development in-house to have full control and be able to change things as data was dictating it to us. We used those funds to make a few hires on the development side. I also brought on board a couple of interns—one intern to help us recruit new brands and designers and another intern on the creative side in terms of graphic design. The second part of that was to launch this beta version of the site and then prepare for a seed round of investment.

Sramana Mitra: When you went into the seed round of investment, what were your metrics? Did you figure out what your customer acquisition costs and customer acquisition strategy were going to be?

Kiyan Foroughi: We had a few channels that we knew were interesting like email marketing.

Sramana Mitra: Where were you getting the list from?

Kiyan Foroughi: We were mostly doing on-site acquisition campaigns. We created a landing page on the website where the main call to action was to give us the email in exchange for x% off on the first order. Then, we would direct ads from AdWords and Facebook to those pages and optimize those pages to convert as many leads as we could.

Sramana Mitra: Do you remember what kind of scale you were able to reach with the email marketing list and conversion rates? Maybe customer acquisition costs? Did you know these numbers when you were raising your seed round?

Kiyan Foroughi: We knew some numbers but to be completely honest, it was not formulaic yet. The original thesis, apart from email marketing, didn’t really turn out to be the actual reality later on when we actually had money. We raised our seed round in May of 2011. It was a $2 million round. I think it was done at a time when people were really hot on e-commerce. The business was showing growth but I think it would be a little bit presumptuous for me to say that at that time, we had figured out our metrics.

Sramana Mitra: The $2 million came from whom?

Kiyan Foroughi: The majority came from a fund of Internet entrepreneurs based in France called ISAI. They provided two-thirds of that round. The rest was a small fund in Japan called Digital Garage. The rest were from angel investors.

This segment is part 4 in the series : Building a Fashion Accessories Marketplace from London: Kiyan Foroughi, CEO of Boticca
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