- Parachute has closed on a $30 million Series C round of funding.
- The home decor brand will use the money to open more stores.
Home decor start-up Parachute said Wednesday it has closed on a $30 million Series C round of funding.
The round was led by H.I.G. Growth Partners and included participation from Upfront Ventures, Susa Ventures, Suffolk Equity, JAWS Ventures, Grace Beauty Capital and Daher Capital. Parachute has already raised more than $14 million to date, according to Crunchbase.
The news comes as investors' appetites for digitally native retail brands are growing, with names like Warby Parker, Bonobos and Outdoor Voices leading the way. And the home category continues to heat up with growth on the high and low end — Amazon has rolled out its own private-label furniture brands, for example, while names like Wayfair, The Container Store, IKEA and Restoration Hardware are competing more aggressively with new store prototypes and revamped websites to win younger shoppers' dollars.
Parachute has amassed a loyal following among millennial consumers by selling bedding and bath linens made from high-quality materials like 100 percent, long-staple Egyptian cotton and sourced from Italy.
"I'm very bullish on retail," Ariel Kaye, CEO of Venice Beach-based Parachute, told CNBC. "We are in a category where historically 90 percent of the products are bought offline."
Parachute currently runs three stores across the U.S. — in Venice Beach, Portland and New York — but plans to open 20 more locations within the next two years. The company said the new round of funding "will accelerate the brand's retail expansion plans" and "help to drive product innovation and category expansion" as Parachute invests more in technology and beefing up its supply chain.
"We are trying to create a retail environment that's more experiential," Kaye told CNBC. "We are totally fine if people come into our stores, touch and feel items, and then go home and buy from their laptops."
Parachute's stores, unlike those of many older brands, are designed to resemble a house. Casper, which sells mattresses and other bedding items, is also opening up locations that mimic bedrooms, truly allowing shoppers to test products before investing in them.
Kaye's goal is for Parachute to become a go-to brand for all-things home essentials. "For us, growing in [physical] retail feels like a no-brainer. We are young and nimble. And we have to look at challenges as opportunities."
The company declined to comment on its current valuation but said that its three shops are profitable.
H.I.G. also recently participated in a round of funding for online fashion brand Lulus. Similar to Parachute, brands like Lulus are looking for capital to bulk up their supply chains and roll out new product categories. From an investor standpoint, there's been a flurry of interest in businesses of late trying to scale in a more niche way in the age of Amazon.