Building a Fashion Accessories Marketplace from London: Kiyan Foroughi, CEO of Boticca (Part 5)

Sramana Mitra: How did you meet these two funds?

Kiyan Foruoghi: I knew one of the founders of the first fund. I didn’t know that he had founded this fund because he was the CEO of France’s biggest e-commerce company called PriceMinister. I just reached out to him as an angel investor. He loved the project. He said, “Actually, for the amount that you’re looking for, I’m the founder of this new fund called ISAI. We’re 60 entrepreneurs who put our money into this fund. We invest in Internet businesses founded by French entrepreneurs across the world.” That’s how we met them.

As for the Japanese fund, our launch was covered in Nikkei Business. One of the guys read the article and cold-emailed me. He said, “I really like what you’re doing.” I said, “We’re actually in the middle of closing a round. We have some room left.” They came to London. We met.

Sramana Mitra: $2 million, closed in May of 2011, right?

Kiyan Foroughi: That’s correct.

Sramana Mitra: What happens next?

Kiyan Foroughi: We started building the team. We didn’t really have a real customer acquisition and marketing team at that time. I was the one doing it. It was about recruiting a marketing team and really starting to experiment to figure out our marketing formula and come up with a formula that is profitable, scalable, and sustainable. We made a couple of hires for the development team. We had increasing pressure on our content team as well. We did a lot of that with those funds. With this round of financing, the goal was to really nail the acquisition strategy so we could do a proper Series A round.

Sramana Mitra: How long did the $2 million last before going for the Series A and what did you achieve metrics-wise?

Kiyan Foroughi: We did the Series A in September of 2013. That gave us nearly two years and five months of runway. It was a fairly large seed round. The Series A was $4 million.

Sramana Mitra: Going into Series A, what was your revenue level? What did you learn about the business at that point?

Kiyan Foroughi: At that point, we figured out two things. One was an activation funnel. The most formulaic customer acquisition strategy was still email for us—going to our email databases and activating it over time. We hadn’t really developed a secret sauce or formula to it. By the time we raised our Series A, we figured out this is how we activate users over time. We had a welcome program and if you passed the welcome program, we’d put you into a cultivation program where we try to drive more repeats. If you didn’t pass the welcome program with a purchase, then we would put you into a second-tier of our welcome program that tries to get that conversion. Quite importantly, we also figured out where we’re finding emails that are actually converting. We tried the whole range of different places. Some were working better than others.

This segment is part 5 in the series : Building a Fashion Accessories Marketplace from London: Kiyan Foroughi, CEO of Boticca
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