Deal in focus: Connect Ventures leads €1.2m round for The Cloakroom

Founded last year by Asbjørn Jørgensen and Kasper Brandi Petersen, The Cloakroom offers an online personal shopping service for men. It does so by assigning a free personal shopper to each customer that completes an online style quiz on the site.

The assigned personal shopper will then contact the customer to discuss their needs and wishes, before sending a box of 10-15 hand-picked items of clothing. The customer then purchases the items he wishes to keep and returns the rest to The Cloakroom.

"Most men don't like to shop; they have a busy life and are not keen on going to crowded malls at the weekend to do their shopping," says founder Brandi Petersen. "The convenience of online shopping means avoiding the obvious tedium of lining up for items and squeezing through crowded and narrow stalls. This was basically all we needed to build our current business on. The main demographic are men aged between 28 and 50 years old, who may lack the time or interest to go shopping but still seek to look professional and smart."

First Netherlands investment for London-based VC

The concept is garnering the interest of Europe's venture capital industry, with German counterpart Outfittery raising €13m from a consortium of investors including Highland Capital Partners Europe, Holtzbrinck Ventures and Mangrove Capital Partners in February.

Outfittery operates throughout the DACH region (Germany, Austria and Switzerland), while The Cloakroom's efforts are focused on the Benelux and Nordic regions. With the company's new funding, founders Jørgensen and Petersen plan on expanding the business further in the Benelux region and into Scandinavia, with a new showroom set to open in Copenhagen in September.

Both native Danes, the founders chose to base their company in the Netherlands due to the country's more central location in Europe, which they say is perfect for expansion. Jørgensen also considers Amsterdam "a great place to test your business because of high internet and e-commerce penetration".

The Cloakroom will use the fresh capital to make hires for its new showroom in Copenhagen. "We are already searching for staff, such as a country manager and personal shoppers," says Jørgensen. The service is already available online in Denmark.

Going Dutch
The deal marks Connect's first investment in Amsterdam. The firm invested via its maiden fund, which launched in 2012 and held its first close in May of that year on €16m. The fund held its final close last year, says Connect partner Sitar Teli. It had a target of £35m, according to unquote" data.

"We actually haven't spent much time in Amsterdam looking for investments, though that might change now," says Teli, who led the deal for Connect. "Robert Verwaaijen, formerly of Prime Technology Ventures, introduced me to Asbjørn and Kasper as he was impressed with the first meeting he had with them and thought they fit our investment focus."

The deal was carried out on a proprietary basis, with no advisers used for the transaction. Angel investors Hein Pretorius and Kees Koolen took part in the round alongside Connect. The capital raised will also be used by the company to develop a new online platform that allows users to coordinate outfits.

The Cloakroom is already reporting 30% month-on-month growth figures and has created partnerships with well-known brands including Hugo Boss, Tommy Hilfiger, Scotch & Soda and Tiger of Sweden.

"The founders focus on staying close to customers and figuring out what they want," says Teli. "This has helped them build a very compelling value proposition. At the moment, they have more customers than they can service – imagine a clothing store with a line out the door."

This deal was originally covered on 16 May 2014.

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• Topics
• Benelux
• Consumer
• Netherlands
• Connect Ventures
• Deal in focus