Direct-to-customer ecommerce startup Resident, whose home furnishing brands include Nectar, DreamCloud, Level Sleep, Awara, Wovenly, Bundle and 1771 Living, has raised $12.5 million from Tel Aviv-based Liquidity Capital.
Resident will use the capital to drive growth and move into additional home products as it expands beyond its mattress base and looks to own every room.
“This investment strengthens our investment portfolio greatly,” said Liquidity Capital Co-Founder and CEO Ron Daniel in a release. “We are happy to be doubling down on ecommerce, pairing Resident with our investment in Le Tote, a leader in ecommerce fashion retail.”
Fashion rental brand Le Tote last year purchased Lord & Taylor from Hudson’s Bay Co. for $100 million.
Liquidity Capital committed more than $200 million in funding in 2019 and plans to fund more than $500 million in the U.S. market in 2020. Investments include Le Tote, Infinidat, ezbob and Sweet Inn.
Resident, which rebranded last year from DreamCloud Holding, has expanded into new categories of home furnishings after its initial success with Nectar, including rugs, furniture and bath essentials, with an emphasis on trial periods and warranties. Rug seller Wovenly, for example, offers free shipping and returns, as well as a 60-day home-trial period.
Nectar last year expanded its retail partnerships to nearly 1,000 stores, including the American Furniture Warehouse, Mathis Brothers and Nebraska Furniture Mart chains.
“Ron Daniel clearly understands all the ups and downs an entrepreneur goes through, as he has already experienced this journey himself,” said Resident Co-CEO Ran Reske. “The fact that they have been entrepreneurs was very important to us in choosing a capital partner.”
Launched in 2017, Resident began as an online retailer of memory foam mattresses via Nectar, later adding the DreamCloud, Level Sleep and Awara brands as sales took off. The company is based in California with offices in New York, London and Tel Aviv.
Nectar is seeing faster growth offline than online, Reske said in a recent CNBC op ed, by working closely with its retail partners and driving foot traffic from the web.