Ever hear of Fab? It’s a retail store site where you can get lots of alternative stuff. I get a lot of artwork, like this cool bull’s head (don’t worry animal lovers, it’s just a piece of art, not a real bull) off Fab. I even got an old school record player there. You can even get food and clothes from Fab. It turns out Fab is getting something too, and I’m not talking business from the consumer.
Fab announced it raised an additional $150 million, bringing investments?over $300 million. Even before these investments, Fab was worth over a billion dollars. And the Fab spokesperson expects more investments to come. Who is making the investment? One player is Tencent, China’s largest Internet portal. Tencent owns online messaging, gaming outlets, and a whole hosts of other Internet services. ?As of January 2013, Tencent has around 800 million users. Another cast member is the Japanese trading company Itochu. Many car companies and the food company Dole have their hand in Itochu. Andreessen Horowitz and Atomico are also involved. An obvious reason Tencent will play as a great investor is because it will open door to reach Chinese consumers. Fab CEO Jason Goldberg says it will help bring customers around the world.
But is this too much? I agree, any business needs investors in order to survive, much less thrive. Many believe Fab is growing too fast and raising too much money. But I always thought investors would reserve this kind of help if businesses were in trouble. According to Fab’s own website, in it’s 2-year existence, it has more than 11 million in 26 countries, grew 5 times over in 2012, and has won many an award. Does this sound like a business in trouble? It doesn’t to me. Then why does Fab need to raise all this money in a short time? Goldberg says it’s for improvements and expansions. But can’t he use his own capitol for that? By giving a successful company all this money, what about those companies that are struggling? Do we just let them die a slow death?? That’s my concern. But what’s yours? Do you give a successful young company more money for better success, or should we give it to a small business that just needs that extra financial push?