Zola and Lightspeed walk down the aisle
Announcing our investment in Zola, the leading all-in-one wedding registry on the web.
My wife and I got married a little over three years ago in my hometown of NYC. Our engagement was a bit less than a year, and a good portion of it was spent planning the wedding. The wedding itself was momentously enjoyable. Planning it? Less so.
Like many brides & grooms, I am not fond of the mundane minutia involved in planning a wedding — picking vendors, collecting addresses, designing invitations, etc. I was told that setting up our registry would be a ray of sunshine in the midst of all this drudgery. It’s the first activity a young couple does to formally set up their life together. We were excited to finally have kitchen appliances, dishes, flatware, and other things that “adults” seem to be proud of.
But I was disappointed when the registry options I saw were, for the most part, department stores. The year was 2013, and my experience was identical to that of my parents in 1978. We made appointments to wander around Macy’s on a Saturday with a barcode scanner, adding a bunch of stuff that happened to be on the floor. Having then forgotten about many of these items until they started to arrive, I kicked myself for picking things I didn’t really want, but felt forced to add by the limited selection of the retailer. I made a mental note that this experience could be so much better on the internet.
2013 was also the year Zola was founded. The product launched a few months after my wedding. While I didn’t get a chance to to enjoy Zola at the time of my wedding, I’m making up for it now!
I am pleased to announce that Lightspeed is leading a $25 million investment round in Zola.
In just three years, Zola has grown from a raw idea to the leading all-in-one wedding registry on the internet, with an annual run-rate of $120 million of gross merchandise value. Zola sells over 40,000 items and experiences from over 450 brands. Over 7 million guests have attended a Zola wedding to date. The team has accomplished all of this on a fraction of the capital they have raised.
Zola’s mixture of fast growth and capital efficiency is highly unusual in e-commerce. What makes the company so special?
First, Zola holds no inventory. All its products are shipped directly from the merchant. Managing hundreds of drop-ship relationships and still delivering a high quality customer experience is challenging, so the team has invested heavily in software and predictive analytics. The result is a solution that performs equally well for both merchant and end-customer.
Second, the wedding registry itself encourages a unique buying behavior. Couples specify what guests should buy months ahead of time. Guests show up with baked-in purchase intent. In fact, they show up not necessarily with a product in mind, but with a dollar value. Items are evergreen, not seasonal. Returns are very low because couples have months to consider what has been purchased. If they change their mind, Zola allows them to do a “virtual exchange” before the item ever ships. If they don’t want the product right away, Zola allows them to have it delivered later. If guests want to give experiences, or cash gifts, Zola supports that behavior.
Third, wedding gifts are a $19 billion category in the U.S. with no pure play competitor. The four largest wedding registries are the bricks-and-mortar players — Bed Bath & Beyond, Macy’s, Target, Crate & Barrel. Their aggregate market share is currently shrinking. Similarly, the home goods industry has seen anemic growth in retail channels over the last decade. E-commerce in home goods, however, has grown from $2.6B in 2004 to $14.1B in 2015. Zola appears to be a beneficiary of that growth.
Fourth, and most importantly, the Zola team is exceptional. The CEO, CTO, President, Chief Design Officer, Chairman, VP of Analytics, VP of Operations, VP of Engineering, and other core team members all worked together as early employees at Gilt Groupe and were responsible for many of the company’s most successful products. The team members aren’t just experienced; they’re experienced with each other. That common language and culture help them move faster and get more done than the average team.
I am thankful to the company’s co-founders — Shan-Lyn Ma, Nobu Nakaguchi, and Kevin Ryan — for giving us the opportunity to work together. I am thrilled to be joining the board, and my partners and I look forward to helping Zola deliver delightful weddings to couples everywhere!
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