H.I.G. Growth Partners News
With $30 Million Round, Cuyana Eyes US Expansion
The leather accessories startup has its latest funding from private equity firm H.I.G. Capital, and plans to use the capital to open new stores and improve its supply chain.
SAN FRANCISCO – February 5, 2019 - In its six years, Cuyana has built a loyal base of customers in coastal cities like New York and Los Angeles who return time and time again to buy its leather totes and travel cases, with materials from Italy and monogram options. Now, after their latest funding round, the brand is courting new customers in the rest of America.
The accessories startup just raised $30 million in its latest round, backed by private equity firm H.I.G. Capital, which brings Cuyana’s total funding amount to just under $45 million, according to its founders Karla Gallardo and Shilpa Shah.
“We’ve been killing it and now we want people to know,” Shah said, pointing to Cuyana’s 40 percent of total sales that come from repeat shoppers.
With the new capital, the brand plans to expand its brick-and-mortar footprint, improve its supply chain and develop new products, they told BoF.
Cuyana has five permanent retail stores in New York, San Francisco, Palo Alto and the Los Angeles area. In 2019, the company aims to open a handful of new stores, including locations in which Cuyana has launched previous pop-ups, such as Chicago, Seattle, Washington, DC and cities in Texas.
“Our stores are marketing hubs for us. Signing leases and opening doors can be done quickly, but immersing ourselves in every neighborhood is unique to each locality,” said Gallardo, adding that Cuyana stores drive traffic to its website, even months after opening.
Part of how Cuyana is able to show its profitability is its margins on each purchase, Shah said. “How much we spend per customer on marketing is $45, but with every first purchase, we take a profit of $75." (The company is currently profitable.)
According to John Kim, managing director of H.I.G. Growth Partners, the biggest opportunity for Cuyana lies in customer acquisition. “When we did awareness surveys, the company that came out on top was Coach. We think Cuyana has the opportunity to become [this type of] tremendously big brand.”
H.I.G. Capital participated in the funding through its growth equity fund, as well as in partnership with d.Luxury Brands, a growth management company that focuses on “modern luxury” consumer brands. Previously, H.I.G. and d.Luxury have invested in linens company Parachute.
Out of the hundreds of businesses in the consumer product space that H.I.G. and d.Luxury has accessed, “every few have the winning metrics that Cuyana has,” said d.Luxury founder and chief executive Ben Macpherson.
H.I.G.’s portfolio of consumer companies include Lulus, an online store for women’s apparel.
With its new funding, Cuyana will also work to speed up its supply chain and source new factories as it considers new product categories, such as beauty, shoes, jewellery and home.