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Totsy Raises $18.5 Million in Financing to Battle Rival Zulily

As competition heats up among flash-sale websites, Totsy has received $18.5 million in new financing, giving the site more firepower to battle main rival Zulily.

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AP

Totsy, which sells products for babies and young children, said its revenue climbed 125 percent in the first half of this year from the period a year-ago. Despite that strong growth, Totsy CEO and Co-Founder Guillaume Gauthereau said there is still a big market left to tap.

The site has about 3 million active users, but there are about 35 million new mothers in the U.S. and about 400,000 more are added every month. Gauthereau plans to put a portion of the series B financing to work to woo new customers through marketing and strategic partnerships, such as one it has with Parents.com. He said another announcement on this front will come in September and October.

Totsy has tried to differentiate itself from other online retailers in the flash-sale space.

Although it follows the same format other sites do, with limited-time deals on merchandise, the site is also working to cultivate its audience by being not only a shopping destination, but also a place for mothers to get advice and tips from other mothers.

Still, even with the renewed commitment from Totsy’s investors Rho Ventures and DFJ Gotham, the site trails Zulily in size and number of users.

But Totsy claims its audience is more engaged, as evidenced by its strong following on Facebook, and it hopes to leverage that in the months ahead.

As a result of the new financing, Habib Kairouz, a managing partner at Rho Ventures, will join Totsy’s board.

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