Totsy, a flash sales site for baby and prenatal care products, announced today that it’s raised $18.5 million in series B financing from Rho Ventures and DFJ Gotham. Named one of America’s Most Promising Companies by Forbes in December 2011, the company says revenues are up 125% from the first half of 2011. The New York-based company previously raised $5 million from Rho and DFJ in November 2010.
“We have a good relationship,” CEO Guillaume Gauthereau said of his investors. “They understand the business, see where we’re going and trust us to get there. ”
Totsy was founded in 2008 by Gauthereau and CMO Christophe Garnier. The company uses a flash sales model where products, ranging from maternity wear to baby toys, are offered at a steep discount for 72 hours.
Though the company currently has 3 million mothers registered on the site, Gauthereau noted that with 35 million mothers in the U.S., and 400,000 more every month, there’s plenty of room for growth. Totsy plans to use half of the money raised for marketing and user acquisition. The company currently uses an affiliate program, partnerships with companies like Disney and Facebook to connect with mothers, along with its refer-a-friend program.
Totsy has also shown a promising tendency to innovate internally. The company’s flash sales model, which involves a massive amount of inventory turnover, presented a problem in terms of photography costs. With the help of one of their photographers, Gauthereau and Co. created what they call a ‘photographer robot’ which now shoots products at 5% original cost. Though the company is a bit preoccupied with their current line of business, Gauthereau says they are “
definitely interested” in spinning the photography robot efforts into a separate company in the future. With ecommerce sites proliferating, any solution that automates product photography while lowering costs sounds like a fairly certain bet.
Totsy competes directly with Zulily, a Seattle-based website that also offers flash sales for baby products.