Business

Floyd locked up a $875K seed round last year (but didn’t tell anyone). Here’s what you need to know.

DETROIT — Floyd, maker of modular table legs, sits at the center of two key themes, one of which is of big interest here at Lean Luxe. The first, is that they’re based in Detroit, and are participating in the city’s ongoing downtown resurgence. The second — and more important one, from where we stand — is that they’re also one of the smarter modern luxury upstarts in the furniture and home sector today.

In something of a delayed fundraising announcement, we spoke to co-founder Alex O’Dell, who filled us in on the brand’s unpublicized $875K* seed round from May 2016 led by LZB Investments (the investment arm of global furniture brand La-Z-Boy). Condensed highlights below:

First, the background details on Floyd.

O’Dell and co-founder Kyle Hoff started Floyd in 2013 as a reaction to IKEA. The logic according to O’Dell: Most IKEAs are an hour or more away from where people live, and there’s typically a big assembly process. Plus there’s the fact that most view IKEA as a good enough product, a holdover. That IKEA bed or table set is fine for college, but not something you want to hold onto for much longer after that.

A big launch on Kickstarter: $256K. The goal was to sell 100 sets of table legs; instead they sold 1,300.

Why table legs? Getting furniture company built around the idea of ease and rethinking the approach to furniture. Table legs, as a first product, was a cost-effective way to enter the furniture stakes: simple, modular, and compared to a complicated product like a sofa, and not nearly as capital intensive.

Floyd’s main ambition is to go mass market. “Our ambitions are much more [focused] on becoming a mainstream solution, a mass market solution. Table legs isn’t quite that. So that’s why we’re continuing to evolve the product line. That’s a big initiative for us.”

Their bed frame, introduced last year, has become a big driver of growth and points to the direction you should expect Floyd to continue going. The idea behind it: buy it online, it ships to your door in a few days — and is easy to assemble: just 13 parts, compared to an IKEA Malm bed, which comes with over 100 parts. O’Dell told us that they see their model maturing over time as a company that tackles apartment essential categories.

What about the seed round?

  • The total: $875K Seed.
  • When: May 2016, round led by LZB Investments (the investment arm of La-Z-Boy, one of the largest furniture companies in the world, and also based in Detroit, about 30 minutes away from the Floyd office).
  • Also included in the round: Joe Gebbia (co-founder, Airbnb).
  • What the funds will be used for: Better fulfilment (quicker orders en route to better customer end experience), better customer service system, further refinement of the product, marketing spend.

Again, this speaks to the argument we’ve made for modern luxury investments: Go with investors who can offer you more than just a check. More and more, we’re seeing smart MLCs (Lively, Mizzen+Main, Tracksmith, etc.) align with strategic investors who offer the ideal MLC investment mix: deep pockets and industry-specific expertise.La-Z-Boy, with a cache of furniture operations expertise appears to be a strong partner for Floyd as they look to broaden their market. How they’ve helped so far: supply chain improvements, fulfillment process.

For all products, but the bed frame, they sell about 30% international. “That’s with no marketing, purely organic — and it’s been steady since we started,” said O’Dell. La-Z-Boy operates in over 20 countries, and given that will be a key advisor for the brand as they also look to scale Floyd globally.

What’s next?

Revenue target: Looking to surpass $5M in sales this year.

A future Series A is also being considered, O’Dell told us. Stay tuned.

Should we expect an Airbnb – Floyd collaboration soon? It’s possible, but doesn’t sound imminent. “There’s a lot of brand affinity with Airbnb. I think the way that they’ve really rethought how people think about their home, how people think about the idea of home. We’re also doing that, rethinking the things that you put in your home.”

A full table is on the way. “We’ve spent a lot of time about thinking what is the true table solution we want to offer? In the next few months, we’re going to be releasing [an actual] table. It’s going to be pretty different and something I think a lot of people are going to be excited about.”

One fun fact.

A new world record with Andy Spade. Floyd partnered with Spade’s sleepwear brand Sleepy Jones, for an event at the Spade store in Soho. The purpose: To set the world record for a number of jumps on a bed. Number of jumps: 2,357. Not bad.

“We like to think we hold the unofficial world record for number of jumps on a bed,” he told us. This seems silly on its face, but actually is a smart, playful way to hammer home the Floyd personality — and further align it with the home. Sleepy Jones also connects them with a important customer set. “We want to do more of that,” said O’Dell. “We want to collaborate with like-minded brands that might not be in the furniture space — that really excites us.”

*Correction: We’d initially stated that the size of the seed was $8.75M. We’ve corrected that to include the actual number: $875K.

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