Tarek Müller founded his first business as a teenager and almost went bankrupt. On Thursday, the now 29-year-old managing director of clothing retailer About You was pleased to see his company join the ranks of unicorns, tech startups that have a market capitalization of at least $1 billion. “We are very proud,” Mr. Müller, a co-founder of About You, told Handelsblatt.
The 4-year-old online fashion retailer raised $300 million in fresh funds. Danish family-owned investment group Heartland contributed most of the sum and obtained a stake of at least 10 percent in return. The exact proportion was not disclosed. Mr. Müller, his two fellow managing directors and co-founders, and two other shareholders also participated in the capital increase. Majority shareholder Otto Group, a German wholesaler and retailer with €13.7 billion in annual sales, did not, and saw its stake fall below 50 percent.
Heartland’s investment is a seal of confidence for About You: Through its subsidiary Bestseller, the Danish investor owns several large European fashion chains and brands, including Jack & Jones, Vero Moda and Only. Some of the brands are also sold in North America, the Middle East and India. It also owns a 10 percent stake in About You rival Zalando and 30 percent of British peer Asos. Danish businessman Anders Holch Povlsen and his family own Heartland.
IPO is an option for About You
“We are very honored that such an experienced investor believes in our business plan,” said Mr. Müller, referring to Heartland. The German entrepreneur, known for his dreadlocked hair, co-founded About You in 2014 as a subsidiary of Otto Group, a household name in Germany with its own web shop, Otto.de. A year earlier, he had sold Otto some of his own startups, which produced and ran web shops and offered e-commerce consultancy.
About You’s revenue reached €283 million in the 2017-2018 fiscal year, which ended in February, more than doubling from the year before. It aims to reach a turnover of €450 million to €480 million in the current book year and wants to hit €1 billion by 2022.
With the help of Heartland, About You plans to expand in Europe, where it currently covers seven countries, including Germany, Switzerland, the Netherlands and Poland, and enter markets such as sports apparel and children’s fashion.
Zalando, the Berlin-based fashion e-commerce giant founded in 2008, is still light years ahead of About You in terms of revenue. Zalando, which went public in Frankfurt in 2014, sold €4.5 billion worth of clothing and related products last year.
If all goes well, About You could one day follow in Zalando’s footsteps and list on the market. Otto’s boss, Alexander Birken, last fall said for strongly growing subsidiaries a public listing was “a serious option.” That could crown Mr. Müller’s career.
Georg Weishaupt covers the luxury and fashion industry for Handelsblatt. Gilbert Kreijger is an editor with Handelsblatt Global. To contact the authors: firstname.lastname@example.org and email@example.com