Hollar is bringing the dollar store online
In eCommerce, expertise matters. Margins are lower than in software or media. As a result, success depends on operational excellence, on merchandising and marketing being just right. Repeat entrepreneurs always have an advantage from having walked down the startup path before, but this is particularly true in eCommerce.
Over a year ago, Brian Lee and David Yeom came to me with an idea for a new ecommerce company, Hollar. I knew them both well. Brian I had funded twice before, at ShoeDazzle and The Honest Company. He is the Chairman of Hollar. David, the CEO, I knew almost as well. He had been VP Marketing at Honest for several years. They made two observations.
The first was that the deep value segment of retail, the “Dollar Store” had stubbornly resisted any moves to go online. Even mighty Amazon had been unable to bring it online. The price points were so low that the Amazon Prime “free shipping” bludgeon that it had used to batter its way into becoming the first choice for customers shopping online became a drawback instead of an advantage.
The second was that the Japanese chain Daiso had meaningfully reinvented the dollar shore experience by bringing a combination of cleanliness, order, high design and appealing product to the category. They were like the Apple stores of the category, beautiful looking showrooms based in cities and malls, a far cry from the confusing, messy exurban bazaars that characterized the industry. They made shopping in a Dollar Store fun.
Hollar was born to bring the surprise and delight of finding wonderful things at a remarkably low price online.
Brian and David decided to get the band back together again. They recruited Thanh Khuu, previously CTO of Shoedazzle, and Eddie Rhyu, previously head of design at Shoedazzle, as cofounders. They also added a cofounder with industry expertise whose resume reads too good to be true. Jonatham Um went to Harvard undergrad and Columbia law school, then signed up to the Marines. He practiced law in JAG but wanted to get closer to the action so volunteered to join the infantry in Iraq where he led a company of Marines in Ramadi. When he mustered out he got an MBA from UCLA, joined McKinsey and from there joined a client, 99 Cent Only, where he ran Strategy. He is a real life action hero.
We were thrilled to lead the first round of financing in Hollar.
Many of the team had been working together since 2009. A team that has worked together before simply operates at a higher clock speed than a team still trying to gel. People share assumptions, share a common shorthand, know what each other will think, trust each other. As a result, Hollar went from being an idea in the summer of 2015 to a launch in November of 2015 to driving over $1M of revenue in the month of June, and continues to grow at a similar pace. And along the way, they eliminated the single biggest existential risk to the company. At such a low price point for each item, starting at just $2, Hollar needs a big enough basket size to be able to sustain the shipping costs. And it saw the basket sizes that they needed to. Through great merchandising and great product design, customers were adding a lot of items to their carts before checking out.
A team this good, and growth this fast, of course attracts attention from other knowledgeable investors. Shortly after launch last year, Danny Rimer of Index led a $12M round of financing for the company and today we’re excited to announce that Eric Feng of KPCB is leading a new $30M round that should take the company to scale.
Hollar is shaking up a sleepy industry by focusing on using the internet and mobile to provide a profoundly better user experience for the dollar store market. We’re glad to be able to take advantage of Danny and Eric’s considerable expertise from companies ranging from Farfetch to Etsy, Hulu to Flipboard. User experience, design, merchandising, marketing and operations are the keys to success at Hollar, and both Danny and Eric bring perspectives from companies that are best in class in each of these areas.
We’re excited to see another massive category of retail get disrupted by David and the team at Hollar.