J. Crew Chief and American Express Invest in Warby Parker
Warby Parker, the hip purveyor of retro-style glasses, has solidified ties with two of its most prominent fans.
Now the three-year-old start-up can count Millard S. Drexler, the chief executive of J. Crew, and American Express as participants in its latest round of financing, which closed last month at $ 41.5 million.
The two join an already expansive group of investors that includes General Catalyst Partners, Spark Capital, Tiger Global Management, Thrive Capital and Menlo Ventures.
The presence of Mr. Drexler and American Express highlights the growing popularity of Warby Parker, whose founders created the online glasses seller in their spare time at the Wharton School of the University of Pennsylvania and quickly struggled to meet consumer demand.
Company executives first closed the round last September at $ 37.5 million, but left some room and time for select investors to come in as well.
“We’ve tried to be very deliberate in getting people with specific expertise,” Neil Blumenthal, one of Warby Parker’s founders, said in an interview. “Nobody knows retail like Mickey. And within financial services, nobody knows a brand more prominent than American Express.”
Mr. Blumenthal and another founder, David Gilboa, declined to comment on the valuation that the round is based on. But they said that their investors consider the retailer a lifestyle brand, which commands a higher value than an e-commerce company.
Since its founding, Warby Parker has shown significant potential in its business: selling prescription glasses and now sunglasses almost exclusively online at relatively low costs. The company has emphasized customer service by allowing prospective buyers to try on several frames before buying, and using Facebook and Twitter as ways to keep in touch with customers.
Its growth over the last three years has been largely through word of mouth, with the company having run its first television ads this year.
The company has drawn the attention of investors who hope it is less an e-commerce platform and more a brand poised to become the next Tory Burch. Such has been the demand that Silicon Valley venture capitalists regularly flew to New York to beg the founders for breakfast — and then a chance to invest.
“They treat clients like relationships,” Joel Cutler, a founder of General Catalyst, said of Warby Parker’s management. “They’re very much oriented toward telling people about a lifestyle they want to associate with.”
Among those believers is Mr. Drexler, whose successes at Gap and then J. Crew have elevated him to a wise man of retail. He began having regular lunches with Warby Parker’s founders to chat about their retail ideas.
By the time the company began raising its series B round of financing, company executives wanted stronger ties with Mr. Drexler, their informal coach.
“He was excited about some of the exciting retail stuff we were doing,” Mr. Blumenthal said. “When it was time to raise money, we wanted to get him formally involved.”
American Express has been a supporter for some time as well. The firm’s vice chairman, Edward Gilligan, invited Warby Parker executives to speak to employees early in the start-up’s life. The financial services titan also is sponsoring Warby Parker’s “Class Trip,” a cross-country promotional tour aboard a lavishly furnished yellow school bus.
While Warby Parker is collaborating with American Express on its Sync program, which offers rebates to Twitter users, there are no similar plans yet to work with J. Crew on retail partnerships, Mr. Blumenthal said. The emphasis remains on selling directly to consumers.
But the company is looking to raise its profile even more. It has been working with the Standard line of hotels on programs like artists-in-residence and a seaplane ferry from downtown Manhattan to the Hamptons.
It is also in talks with Google on providing stylish options for the tech giant’s computerized glasses product, according to people briefed on the matter.
“We really feel like we’re in an inflection point,” Mr. Gilboa of Warby Parker said. “We feel like we have a really solid foundation for the brand.”