Neighborhood Goods revealed it has raised $11 million in a Series A round of funding.
This new round brings the Texas-based retailer's total funding to $25.5 million. The Series A was led by Global Founders Capital, with participation from previous investors Forerunner Ventures, Serena Williams’ Serena Ventures, NextGen Venture Partners, Allen Exploration and Capital Factory.
Calling itself “a new type of department store," Neighborhood Goods will use the funding to expand to different locations. Currently, it only has one store in Plano, Texas, which opened late last year. It will open a second in New York’s Meatpacking District this year, and a third location in Austin, Texas in 2020. There are also plans to roll out a few more stores next year.
In fact, Co-founder Matt Alexander told CNBC that he can see the company eventually opening a new shop every three to four months. “That general cadence feels about right,” he said. “Certainly we have the real estate interest.”
In addition to launching other locations in the United States, the retailer will also use the funding to build its staff, boost its supply chain with faster delivery options and build out a back-end digital platform for its brand partners.
Launched in 2017 by Alexander and Mark Masinter, the retailer's 10,000-square-foot Plano location features dozens of brands, including razor company Dollar Shave Club, watchmaker Fossil, men’s clothing brand Buck Mason and women’s shoe company Rothy’s. There is also a restaurant called Prim and Proper, and weekly events such as workout classes, gardening workshops and taste testings.
“A lot of [traditional] department stores out there are trying to feature young brands,” Alexander said. “But a lot of them are still huge spaces that aren’t compelling for people to go in and spend a lot of time there. … Department stores are not a great vehicle for discovery.”