For years, venture capitalists exuberantly assumed Fab, the online furniture store, could be worth $1 billion, despite mounting evidence that it was difficult to make money off of flash sales. Now TechCrunch reports that Fab may soon be sold to PCH International, an Irish supply chain company, for $15 million "and possibly as much as $50 million."
That's not only a fraction of Fab's former valuation, but a pittance compared to the
$336 million that blustering CEO Jason Goldberg raised between 2011 and 2013. If PCH deal doesn't close, TechCrunch says some assets will be rolled into Goldberg's new Berlin-based furniture design company called Hem.
A source told Valleywag that despite his second well-funded flop, Goldberg has continued to be temperamental with the remaining Fab employees who did not get behind his vision for Hem. He offered them a severance to leave and many accepted, according to the source, who has some knowledge of the situation.
Your email got forwarded to me.
The situation you describe in Fab Europe is entirely false. I'm not sure who is spreading such a rumor but it is not true.
Another source close to the company says it was more routine. At a recent meeting, 13 employees accepted an offer to opt-out in 2015. Last month, Goldberg told TechCrunch that Fab was burning through $14 million a month before layoffs and restructuring dwindled the company down to 25 employees. The source close to the company said that roughly 150 people are working for Hem:
We have about 150 people working for Hem. 50 of the 150 are in Berlin. There are also teams in Stockholm, Warsaw, Helsinki, New York, and Pune working on full-time Hem. We decided 3 weeks ago at a management offsite in Helsinki to do a year-end calibration to make sure that everyone on the team wants to be part of our Hem plan for 2015 to 2016. Hem was formed by a merging of parts of Fab, One Nordic, and MassivKonzept and we want to make sure we are one Hem team in 2015 and beyond, with everyone signed up to the Hem plan. 13 people in the Berlin office took a voluntary leave package this past week. It's just normal business.
Have you ever been clinging onto a rocket ship, then cut the engines at full speed, and then tried to fly again?
Shellhammer's curiosity initially led him back to the same well of inspiration. A source told Valleywag that he is launching a company called Design Scout. About a week ago, Shellhammer got a Design Scout trademark approved for publication and the description sounds an awful lot like Fab itself.
On-line retail consignment stores featuring household goods, furniture, and household furnishings; On-line retail gift shops featuring household goods, furniture, and household furnishings
In the past two week, Shellhammer has posted 15 photos on Instagram from Lerer Hippeau Ventures office in New York. But Shellhamer told Valleywag he merely owns the domain, is not launching Design Scout, and is not being funded by Lerer Ventures:
I'm not launching a company called design scout though I do own the domain. I have been working out of lerer's shared office space. But the space I am in is an open space where many companies rent desks and many are not associated with lerer. I will happily chat with you about what I'm doing next. But not ready to yet as still working on it.
When I pointed out the trademark, he said he had filed it, but was not working on the concept:
I did. Not working on design scout as a business now. I hope that's helpful. :)
As we noted when he quit, Shellhammer is known for the love of the finer things and his great taste in design, which helped catapult Fab's initial fast growth. He was also a big supporter of the flash sales model popularized by the French company Vente-Privée, which abruptly shut down its U.S. operations last month, and Gilt Groupe, which had layoffs this summer and has held off on its long-rumored IPO.
Shellhammer recent spoke at a conference about the supply side of the "on-demand economy"—a more accurate name for startups like Uber and Airbnb, which were once described as pillars of the "sharing economy." His affiliation was listed was "Design Scout/Fab.com - Co-Founder." ( Josh Mohrer, the general manager who is being investigated by Uber for violating the reporter's privacy, was also a speaker.)
Here's a brief sampling of the Lerer Ventures photos that Shellhammer posted on his @YoungBradford Instagram account.
Next time you find yourself judging someone else's attempt at creation from your arm chair, rather than lust in the savory details, get off your fucking ass and create something instead.
You heard the man. Cut off your dopamine drip and hop to it.
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[Top image via Getty]