Social beauty store Bloom.com closes $5.4m Series A led by Capricorn

Xuba, the Omaha-based social commerce startup behind social beauty store and network Bloom.com, closed a $5.4 million Series A round, the company’s co-founder and CEO Julie Mahloch (above) confirmed in an interview on Monday. Capricorn Investment Group led the round with a $5 million investment. Capricorn, which is the investment arm of eBay founding president…

Bloom.com was co-founded by Julie Mahloch (above) and Doug Nielsen, two of the three co-founders of Hayneedle, an ecommerce company that counts Insight Venture Partners and Sequoia Capital as investors.

Xuba, the Omaha-based social commerce startup behind social beauty store and network Bloom.com, closed a $5.4 million Series A round, the company’s co-founder and CEO Julie Mahloch (above) confirmed in an interview on Monday.

Capricorn Investment Group led the round with a $5 million investment. Capricorn, which is the investment arm of eBay founding president Jeff Skoll and other entities, will soon open an Omaha office under the leadership of Stephen George, Capricorn’s co-founder and chief investment officer. Also participating in the funding round were an undisclosed number of previous angel investors.

Xuba will deploy all of the $5.4 million to Bloom.com, which is Xuba’s first and currently only property. The funds will be used to expand Bloom.com’s team and invest in infrastructure to support what Mahloch foresees as exponential growth. Less than six months after its public launch in August, Bloom.com hit 100,000 members.

“Bloom, we believe, is a business that would easily raise funding – West Coast, East Coast and Europe,” George said in an interview Monday, “and here they were in Omaha. So it’s just a real gem to find.”

George joins Malhoch, a co-founder of Hayneedle, Doug Nielsen, a co-founder and the current CEO of Hayneedle, and Jeffrey Noordhoek, the president of NelNet (an Xuba investor), on the board.

“Bloom, we believe, is a business that would easily raise funding – West Coast, East Coast and Europe – and here they were in Omaha. So it’s just a real gem to find.” – Stephen George, Capricorn Investment Group

“For me, it was more than money. It was just really having this type of connection with Capricorn and Stephen George and really having him a part of our board,” Mahloch said. She believes George, a Nebraska native who recently relocated to his home state after more than 20 years working in investing and software startups elsewhere, brings knowledge, excitement and connections that will be beneficial to Bloom.

Capricorn, whose past venture capital high-growth investments include Glacéau (maker of Vitaminwater; acquired by Coca-Cola in 2007), Tesla Motors and Truecar, was attracted to Bloom.com, George (left) said, because it’s in a “brand new space,” social commerce, and a market ripe for disruption, beauty products. George added that no one in the online world has owned the beauty space or, for that matter, come out with a deeply integrated social platform.

“There’s this massive customer acquisitions pool, an ocean of customers within Facebook,” George said, “and the data is there as to who is passionate about these different interest-specific areas.” He noted that Capricorn is a “strong believer in category-specific or interest-specific networks,” especially when there’s passion around those sectors.

Users on Bloom.com’s platform take advantage of current social and customization features such as filling out their public “beauty cabinet” with one of the site’s 150 “top beauty brands” – Bloom expects to expand to 250 brands this year – or completing a questionnaire that results in “Best4You” recommendations. The site also features Zappos-esque customer service with its phone number displayed on its homepage and a 365-day return policy. 

Bloom.com users share the products they buy or use with other members of the site in their beauty cabinet.

Aside from the online platform, George said Capricorn was also attracted to Xuba’s immediate focus on revenue and the team it constructed, including beauty industry veteran Nick Hudson and the former CFO of a public company, David Vana.

“Ultimately – it’s almost perhaps a Midwestern thing – instead of building a social network and figuring out how to monetize later, Bloom actually started with an ecommerce platform,” George said. “It’s doing very well, it’s growing every single month at extremely attractive rates.”

Bloom.com currently has around 20 employees, and it plans to add 10-15 to its team in 2012 – on Friday, the company posted seven positions. “The capital will primarily be used to expand our team,” Mahloch said, “so we can bring in really innovative individuals, experienced individuals and motivated individuals to participate in what we think is a pretty exciting platform to develop something that we feel really doesn’t exist today.”

Bloom.com is competing with established beauty product sellers such as Sephora and Amazon.com and newcomers like Birchbox. Mahloch believes it’s also up against other sites utilizing social networks to share and discover products, such as Pinterest and Hunch.

Founded in August 2010, Xuba’s total funding to date is $10.9 million, which includes an initial infusion of capitial from its co-founders, Mahloch and Nielsen, along with an angel round of $2.9 million in January 2011.

Capricorn’s investment in Xuba is its second investment in a Nebraska company. Its first, a $10 million investment in software investment fund Nebraska Global, came in 2011. Capricorn has offices in Palo Alto, Calif. and New York. With George leading the firm’s new focus on the Midwest and making investments ranging from $3-10 million, Capricorn has plans to open an office in Omaha in the coming months.

For more on Bloom.com and its growth, see our post “Bloom.com expects to hit 100K members within six months of launch“.


Credits: Photo of Julie Mahloch courtesy of Xuba. Photo of Stephen George from nebraskaglobal.com. Screenshot of Bloom.com from bloom.com.

This story is part of the AIM Archive

This story is part of the AIM Institute Archive on Silicon Prairie News. AIM gifted SPN to the Nebraska Journalism Trust in January 2023. Learn more about SPN’s origin »

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