Why are women obsessed with Dia&Co?
Partner Ben Lerer discusses LHV’s investment
What is Dia&Co?
Dia&Co is completely changing what shopping is like for plus-size women. What most people don’t realize is, U.S. retail targets women up to size 10; on average, American women wear a size 14. Clearly, there’s an audience here that wants to look and feel good but is generally forgotten by mainstream fashion. Dia&Co is completely rethinking their experience, personalizing it, and changing it into something fun and exciting and empowering.
Why did the founders decide to pursue retail?
Nadia Boujarwah and Lydia Gilbert deeply understand the problem they’re trying to solve, and in my experience, that’s a hundred times better and more effective than someone who says, “The kids seem to be into XYZ vertical today, so that’s the kind of venture I’m going to start.” They didn’t come after retail from the outside. At various times in her life, Nadia has been the customer, and because of that, she understands the psyche of the consumer she’s going after. She and Lydia know it’s a terribly underappreciated market, and they’re serving a real need and seeing significant organic growth because of it. And the reaction is terrific.
What kind of feedback are they getting?
Well, Dia&Co is a subscription service — you take a style survey, and then get a box of clothing that’s been picked out by a stylist specifically for you. And if you look at any of the unboxing videos (like the one below from our portfolio company Mic), people are so excited about the selections.
Nadia and Lydia are building a brand for their customer, and because of that, they’re transforming consumers into evangelists. They’re putting out a product people love, so when someone discovers Dia&Co through word of mouth, they’re instantly brand-loyal.
Is there something the founders did that locked the investment for you?
They’re level-headed, operationally strong, and very passionate about their customer as well as their business. But the thing that really appealed to me? I know I’m going to sound like a broken record here especially after the vertical commerce pieces, but they’re truly customer-centric. Nadia gives a shit, and she listens to the feedback of her customers. They also picked a market — and the data supports this — that is factually a good idea. The numbers are there, and this is one of those categories where, because of the recurring revenue, the loyalty that comes with it, and the product margin, it actually has a really attractive underlying financial model. It requires less capital to grow and can become profitable quickly, and that’s very disruptive to the traditional players who are selling in this space.
This seems like a very specific market. In fact, is there even really a fully-established vertical here yet?
Not really, but I’d give a warning. It’s dangerous to look at these things as a matrix of business models and industries. I worry about the school of thought that look as this as “plus-size fashion on one axis, subscription on the other axis,” and nothing more. Dia&Co is about experience, and they’re using subscription as a disruptive way to drive a better experience for the end-user. It’s an important distinction, because it’s so easy to reduce something to its elevator pitch and call it “the Uber” of whatever, which is the worst and most reductive way to look at it.
Nadia and Lydia are solving a problem for a customer — letting users try things on in the comfort of their own home, giving them support from stylists who give a shit, making consumers the center of attention in a good way — and not just trotting out another clever business model. For me, that’s a win.
P.S. — they’re hiring in New York.
Read more about Ben Lerer and the rest of the LHV team, and check out other Lerer Hippeau investments.