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About the Company

REVOLVE is the next generation of fashion retail, seamlessly combining social content with commerce. Their e-commerce platform is known as the ultimate fashion destination for a unique collection of emerging contemporary apparel and beauty brands, where the coveted millennial consumer goes to discover the latest trends. REVOLVE has built a highly engaged, influencer-driven social community, allowing the brand to achieve extraordinary reach with efficient marketing spend. Based in Los Angeles, REVOLVE’s authentic voice and aspirational content resonate with consumers and lead to strong retention and customer acquisition.  

Our Partnership

Members of the our team were already fans and customers of REVOLVE before our investment. We reached out to REVOLVE’s founders directly and initiated conversations about a potential partnership to help the brand accelerate its growth and expands its reach. We were impressed by the founders, Mike Karanikolas and Michael Mente, who are disciplined operators that understand their customers. They had already built the business profitability without taking on outside capital, and were receiving significant  interest from potential investors. At the time, they were focused on finding the right partner who could add value to the company’s next stage of growth. Ultimately, they agreed to partner with us given our focus on building innovative brands. The investment was completed in December 2012.

Strategic Focus

We primarily serve as a strategic partner to the REVOLVE founders and management team, helping them evaluate opportunities to grow the business and scale profitably.

At the outset of the partnership, we collectively determined that developing in-house brands at REVOLVE would be key to long-term value creation. In 2014, we helped with the aquisition of Lovers + Friends, which became the platform to build a margin accretive owned brands portfolio.

In late 2016, REVOLVE launched REVOLVE Beauty, leveraging its powerful social media engine and expert eye for curation to enter the highly attractive beauty category. We drew upon our deep beauty category experience to advise the REVOLVE team on product assortment, visual merchandising, and site content.

Throughout the partnership, we have provided the REVOLVE team with quantitative consumer insights captured through our deep consumer research expertise and helped the REVOLVE team better understand the market, including competitive dynamics and opportunities to differentiate.

Demonstrated Impact

We have helped drive growth and long-term value by partnering with REVOLVE management across the following initiatives:

  • Re-launched the REVOLVE website in early 2014 with cutting-edge design and user experience, as well as best-in-class content

  • Developed a margin accretive owned brands platform, which now accounts for 20% of REVOLVE’s sales across 13 brands

  • Executed value-based customer segmentation and developed a strategy to define, target, and retain high-value customers to increase lifetime value

  • Invested in strategic brand marketing, specifically social media, public relations, and influencer relationships, and launched the REVOLVE Social Club in 2016

  • Further developed localized sites in new countries to drive international growth

  • Launched REVOLVE Beauty in late 2016

  • Made key management hires to augment the team

Since our investment, net sales have grown ~4.5x, at an approximately 45% annual sales CAGR from 2012-2016.

  • The owned brands platform, launched in 2014, now accounts for 20% of REVOLVE’s sales.

  • Net Promoter Score for REVOLVE has increased 3.5x, illustrating the team’s ability to convert REVOLVE consumers into brand evangelists.

  • The company has been profitable throughout our investment, and EBITDA margin has expanded meaningfully in recent years as REVOLVE scales over its initial investments in strategic initiatives.