A lifestyle brand for millennial buyers with an eye for design – but perhaps not the pocketbook for designer prices – the watch and accessories startup MVMT started on its path in 2013.
Five years in, a journey that started with a crowdfunding campaign has wound through 160 countries where the brand does business, garnered $71 million in sales last year and, as of a few weeks ago, landed an acquisition deal with the Movado Group (makers of the eponymous luxury watch brand) that is worth $100 million to start, and could be worth as much as $200 million when all is said and done.
Not a bad result for Jake Kassan and Kramer LaPlante, two self-described college dropouts who decided they’d rather sell watches than sit in a classroom for one more minute.
“I had financial goals,” said Kassan. “I had goals just in terms of being successful, and I was sitting in a classroom essentially being asked to do a book report. It didn’t really make sense to me.”
Being in business, however, made lots of sense to him – and had ever since he was 12 years old and undertaking his first entrepreneurial effort of selling lollipops. Kassan said he made somewhere between $300 and $400 – a good showing at that age in any event, but particularly impressive given that his asking price per pop was 25 cents (or a deal hunter could buy five for a dollar). He later moved up into selling novelty T-shirts in his teens. In LaPlante, he found an equally enthusiastic young entrepreneur looking for an opportunity.
Prior to MVMT, LaPlante launched Articulate Wallets on Kickstarter, an endeavor that successfully raised $100,000 from almost 3,000 backers.
After doing some research on suppliers, the duo found quite a staggering gap between wholesale and retail prices in watch brands. They realized watches that routinely retail for around $300 could be sold online at a profit for between $100-$160 if they cut out the retail middlemen and primarily sold online.
And, until very recently, they retained their independence. All in, over the course of its five-year span, MVMT didn’t take in a dollar of investment from venture capitalists or angel investors, though many offered. The now $200 million firm took in a total of $300,000 in funding via a product-backed crowdfunding round.
“What we have learned: If you don’t have to raise, you shouldn’t,” Kassan told CNBC in 2016.
And lack of fundraising isn’t the only way in which MVMT was an unusual startup. It also largely eschewed typical marketing efforts in favor of organic, social media-based efforts built around creating a community of enthusiasts, rather than trying to develop a pool of customers. There is a global community of about 1.5 million MVMT owners, and “community” is not an exaggeration. MVMT wearers are very into their watches. And, given the brand’s 4.5 million followers across social media channels, it seems fair to assume there are more people who would like to join.
Among the things Kassan and LaPlante understand better than anyone is how the next generation of people want to buy watches, and also interact with their fellow enthusiasts.
“We both like watches. And there wasn’t any type of watch brand out there that we could really resonate with,” Kassan said. “We are online shoppers. We started this business when we were 21, 22 years old. Being millennials, shopping online, seeing the growth of eCommerce before it really blew up … we saw that coming.”
And now Movado, a classic brand that is hoping to upgrade and update itself for the times, is tapping into the cachet and enthusiasm (not to mention profitable enterprise) that MVMT has built.
“Jake and Kramer have built an incredible brand and business in just five years, and we are excited to have MVMT join Movado Group. Today’s announcement marks an important milestone for Movado Group,” said Efraim Grinberg, Movado’s chairman and chief executive officer. “The acquisition of MVMT will provide us greater access to millennials and advances our Digital Center of Excellence initiative with the addition of a powerful brand managed by a successful team of highly creative, passionate and talented individuals.
“We believe significant growth opportunity lies ahead for MVMT through category, channel and geographic expansion by leveraging our scale and infrastructure,” he continued “I am looking forward to welcoming Jake and Kramer, along with their 40 employees, to our company.”
And though they are moving into a bigger parent, the founders believe the Movado association will help them do more and bring more value to their customers around the world today, while opening them up to vast troves of new customers.
“As we looked at the future for MVMT, we felt Movado Group was the perfect fit to continue our growth. We share many of the same strategies as Movado Group, including a focus on unique design, product innovation and compelling value for the consumer, which aligns us on future plans for our brand,” Kassan said.
“Movado Group has the expertise and resources to help expand MVMT to many untapped markets around the world.”