Boston-based Daily Grommet announced today that it has closed a round of Series B funding for an undisclosed amount led by Japanese ecommerce giant Rakuten. Daily Grommet is an online marketplace and launch platform for curated products, giving over 1,000 previously undiscovered products exposure on its site and through partnerships, including one with Rakuten-owned Buy.com. The company plans to use the funding to invest in building a larger consumer base, speed up their product launches, and invest in building an infrastructure around their relationships with product manufacturers.
Rakuten is no stranger to investments, acquisitions, and partnerships to grow its ecommerce footprint, and has been very active in increasing its reach to become a global heavyweight. It has worked with Daily Grommet through its Buy.com partnership, so is familiar with its platform that sources, curates and promotes one product per day after boiling down about 100 weekly submissions. The funding means Daily Grommet will get access to deeper partnerships with retailers, and Rakuten on the other hand will get access to finding and making profitable previously undiscovered goods with a large and growing community of followers.
The Daily Grommet enables what it calls Citizen Commerce, allowing manufacturers of niche products to reach a consumer market that cares about their stories, their methods, their values, and their beliefs. “We’re all about finding undiscovered products and helping them succeed,” CEO and founder Jules Pieri commented in an interview. ”What’s different and why we’re doing it now is that you can level the playing field with video and storytelling directly, and the community around the Daily Grommet and other social platforms like Pinterest and Kickstarter get to decide on who succeeds, and that’s a real big change in the world, it makes leveling the playing field possible.”
The company’s success lies in the extensive and time-consuming sourcing and curation process. The company aims to feature products that have cutting-edge innovation, are domestically manufactured or hand-crafted, use green technology, and have some sort of social aspect. After a manufacturer is selected to be featured, their product and story is broadcasted globally and told via the company’s daily email, website, and social media accounts (including Pinterest, which received $100 million in funding led by Rakuten in May 2012).
“That part is super hard for these manufacturers, they can’t tell their own stories like we can. Basically we kick off a global campaign for them that day with social media and video email, and the other resources we have,” Pieri said. “At this point we know that a quarter of Grommets go on to reach scale they were hoping for, and when we look back we found that if it does well on Grommet then will go on to do well elsewhere.”
As of now, the company has a multi-platform business model that enables them to cash in from revenue streams on both the B2C and B2B market. They sell directly to consumers, and work closely with manufacturers to set margins. On the B2B front, they are then approached by bigger ecommerce sites, including Rakuten-owned Buy.com, who then pay for recommendations and pay a percentage of the sales made through their sites.
Their emphasis on curation when it comes to the products they feature make them akin to 20×200, an online curated marketplace for art. Although most ecommerce sites recommend purchases to shoppers based on past shopping history, or based on what’s popular, Daily Grommet is trying to tell people what to purchase now, not what to purchase next.
The company currently only ships within the U.S. and Canada, however, with the Rakuten network now accessible, they hope to source products from a much wider global community of innovators. With the additional funding and planned partnerships, not to mention access to other Rakuten portfolio companies like Pinterest, the company is sure to make a much bigger splash as the go-to ecommerce site for the next big retail find.