Crafters of the world, rejoice.
U.K.-based LoveCrafts, a social commerce startup aimed at knitters and other home craft makers, has just announced a major growth round with its successful raising of £26 million ($33 million) in new funding. The firm confirms that it plans to expand into new crafting categories and pick up the pace on on international growth.
The Series C round was led by new investor Scottish Equity Partners and saw participation by previous investors Balderton and Highland Europe. The firm’s total valuation is not being disclosed, but CEO and cofounder Edward Griffith told TechCrunch it was likely “north of £100 million.”
The total raised by the company to date is £43 million ($55 million).
Knitting and crochet don’t have huge mass-market appeal, but they remain a multi-billion-dollar business annually, even if one only counts the revenues of the largest big-box stores serving this market (Jo-Ann Fabrics, Hobby Lobby and Michaels). Note that this doesn’t even count sewing, which has its own highly fanatical and very lucrative community associations.
“You don’t understand how big it is until you start adding it all up,” Griffith said.
Investors, however, are starting to understand just how big it is.
“What was interesting to us in the beginning was the secret of how large the crafting market is,” Stuart Paterson, a partner at SEP, told PYMNTS. “It’s not one that people think of as large and sizeable, but there is about $100 billion of annual spend.”
LoveCrafts will face competition, as Pinterest, Craftsy, Ravelry and PlanetPurl are all competitors in the world of digital commerce for knitting enthusiasts. LoveCraft’s secret sauce — or stitch — is that it doubles as a social network and commerce hub, a combination its competitors have had a hard time replicating.
Griffith noted that there are “millions” of visitors to the site who come to download patterns — the site holds over 100,000 — and though they are largely free, Griffith notes that the site does “nice conversions” on products associated with completing the patterns.
LoveCrafts makes money today only on the sale of yarns and other knitting and crocheting supplies. Funds made from the patterns that are sold are funneled in full back to the creator of the pattern.
Going forward, LoveCrafts will push into new crafting areas, particularly sewing and quilting — and even perhaps into such exotic hobbies as jewelry making or baking.
The U.S. accounts for about 45 percent of LoveCrafts’ market today.