PCH International in Talks to Buy Fab for $15M

At first glance, it may seem like a startup that raised &gt;$300m is selling itself for $15m but that&#x27;s not the case at all. Earlier this year, Fab effectively pivoted from selling stuff designed and manufactured by other companies to designing, selling and manufacturing - and the other those words are in is significant - their own products (i.e. vertical-integration)[1]. That pivot was given a new brand (Hem.com) and it looks like the old Fab brand and business are being sold off, and the focus is now on Hem which, I presume, has the same shareholders that Fab had.<p>1: www.digitaltrends.com&#x2F;home&#x2F;hem-new-venture-fab-like-ikea-customizable-furniture&#x2F;

At first I was confused on who these guys were.<p><a href="http://techcrunch.com/2013/07/29/just-fab-sues-fab-over-trademark-infringement-unfair-competition-and-more-fab-says-it-will-aggressively-defend-our-brand/" rel="nofollow">http:&#x2F;&#x2F;techcrunch.com&#x2F;2013&#x2F;07&#x2F;29&#x2F;just-fab-sues-fab-over-trad...</a><p>Two founders with the same last name<p>found companies with the same corporate name.<p>Not to be confused with &quot;JustFab&quot;[1]<p>_____________________________________________<p>[1] <i>Why can a scam company raise $40 Million Series C + $76 Million Series B?</i><p>&quot;<a href="https://news.ycombinator.com/item?id=6455391&quot;" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=6455391&quot;</a><p><a href="http://www.matrixpartners.com/entrepreneur-stories/adam_goldenberg/" rel="nofollow">http:&#x2F;&#x2F;www.matrixpartners.com&#x2F;entrepreneur-stories&#x2F;adam_gold...</a><p>(Obligatory reply from VC is below)<p><a href="https://news.ycombinator.com/item?id=6455575" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=6455575</a><p>Turns out they are litigating the names

I don&#x27;t mean this in a negative way, but how does a CEO retain control through a fall from $1B+ to $15M? Isn&#x27;t that endemic of significant mismanagement, at least in expectations?

A bit bittersweet for me. I had a failed startup a year ago where we were trying to connect consumers with local woodworkers and metalworkers. At the time, we attributed our lack of success to Fab and their ability to convince consumers to focus on discounts. We had a ton of other reasons for failing but ecommerce, especially for higher ticket items is extremely difficult and definitely sucks that they didn&#x27;t make it work. On an abstract level I feel validated that their model didn&#x27;t succeed but I also sympathize with the founders and the rest of the team. Hopefully they learned a ton and land on their feet.

I&#x27;m always curious what goes into a decision to sell at all in a situation like this.<p>$336 million raised, sold for $15 million<p>Is there actually a good reason to bother to do that?<p>Whatever the case, this is one that&#x27;ll be referred to with the market bubble of 2012-2014 (along with perhaps Twitter&#x27;s former $48 billion market cap, Zynga&#x27;s $15b valuation, the insanity that surrounded Groupon and its $20b valuation, and so on).

I always really enjoyed the products Fab procured, but most of it was way outside my price range, and now they have pivoted to hem, where they sell this table (<a href="http://hem.com/en-gb/product/bento-dinner-table-long-10022" rel="nofollow">http:&#x2F;&#x2F;hem.com&#x2F;en-gb&#x2F;product&#x2F;bento-dinner-table-long-10022</a>) for ~1200$ USD

&quot;Fab has seen some drastic changes in its 3 years of operation. It started out as a dating site for the gay community and then relaunched as a flash sale site for home decor. Fab announced just six months after the pivot that it had grown its membership to 2 million, &quot;<p>Is that stretching the definition of pivot just a bit too far?

Fab Inc is selling off what remains of the Fab brand &amp; website(s). This should not be a surprise to anyone given they pivoted to Hem in Sept:<p><a href="http://techcrunch.com/2014/09/29/hem-fab-europe-furniture/" rel="nofollow">http:&#x2F;&#x2F;techcrunch.com&#x2F;2014&#x2F;09&#x2F;29&#x2F;hem-fab-europe-furniture&#x2F;</a>

I had the pleasure of visiting the PCH Shenzen office recently. Surprisingly cool company. Through an accelerator they help make some interesting products, including Navdy.<p>Quite curious to see what they&#x27;d do with the Fab brand.

oww.. the half-stock&#x2F;half-cash is the insult to injury.<p>nastygal, modcloth (well funded ecommerce) also having tough time.<p>good reminder that 1) ecommerce is hard and 2) vanity metrics on ecommerce is an order magnitude larger than most many entrepreneurs think:<p>&quot;$10 million in goods sold this year&quot; --&gt; not at scale<p>&quot;$1.5 million sold a day&quot; --&gt; still not at scale!