LVMH Luxury Ventures, Antler Backs British Mystery Box Start-up Heat – WWD

LONDON – London-based startup Heat has closed a $5 million seed round funding led by venture capital firm Antler and LVMH Luxury Ventures, invest legal entity operating within the LVMH Moët Hennessy Louis Vuitton.

Angel investors in this round include Stefano Rosso of the OTB Group, the Hermès family, partner of L Catterton, Michael Mitterlehner, founder of Flink, German grocer founder Oliver Merkel and rising director Spotify’s global head, Sven Ahrens.

The new capital injection will be used to create more innovative and rich e-commerce experiences – including implementation of gamification, AI-based personalization, and interaction reduction – while continuing to drive innovation. lasting.

Joe Wilkinson, Heat’s chief executive officer, added that the funding will allow the company to continue creating “a shopping platform for the digital and digital generation.” [we] is positioned to continue to innovate and make an impact in this space. ”

“We are seizing one of the biggest opportunities in luxury retail with consumer behavior changing dramatically in the coming years,” said Martell Hardenberg, partner at Antler. Heat has created a unique platform for consumers as well as brands to create new shopping and selling experiences while protecting brand integrity.”

Co-founded by Wilkinson and Mario Maher in 2019, the London-based company has sold more than 20,000 mystery boxes to more than 600,000 Gen Z-led online communities.

A regular box, which is claimed to hold items worth more than £500, costs £299, while the premium version, which comes with items worth more than £850, costs 500 pound.

Heat operates distribution centers in Sheffield, UK, and Milan and has plans to further expand the network in Europe and the US.

Wilkinson describes the company as a disruptor of traditional high-fashion retail and said Heat is standing “at the forefront of next-generation roadmaps for marketing to Generation Z audiences.”

From a brands perspective, Heat is an attractive outlet for excess stock. By partnering with Heat on the box, brands don’t have to discount inventory or find other ways to change it.

“A lot of brands don’t want to sell or dispose of their excess in the landfill. They needed a new way to get rid of stock that protected brand values,” said Wilkinson told WWD in an earlier interview.

The company started by sourcing products directly from department stores, he said, but soon brands with similar excess stock came in.

Heat currently works directly with more than 60 brands, including Off-White, Palm Angels, Amiri, Billionaire Boys Club and Casablanca, and has expanded its reach beyond streetwear into fashion. Modern and chic for men and women, offering items from brands such as Balenciaga, Loewe, Jacquemus and JW Anderson.

The company has also evolved from its original focus on sourcing in previous seasons to partnering with brands to launch products through its mystery boxes, specifically with Haider Ackermann. and represent the UK men’s brand.

“It has really become a marketing and customer acquisition tool for brands. Now they come to us and say they want to get new season products in the box. Because so many influencers are unboxing on their Instagram Stories, people are seeing the product and want to go out and buy it at full retail,” says Wilkinson.

This way of working with new and old season products allows Heat to provide added value to customers and keep them coming back for more, while brands can experiment with a different way of selling and say stories with consumers Generation Z and Millennial are in demand .

“Brands have come to us through referrals, such as from their wholesale directors, so we’ve seen organic growth. We are aware that we are a new chapter for these brands,” Maher said.

At the time, Wilkinson touted that the company’s next phase was launching mystery boxes for kids and collaborating more with brands on exclusive products that would only come in the box.

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