Whether neon green, pale pink or navy, the Cambridge Satchel Company’s bookish shoulder bag is instantly recognizable. Since 2008, the company has become known as a runaway e-commerce success that founder Julie Deane famously got off the ground with less than $1,000. Last year, it was named the 7th fastest growing non-technology company in the UK, with sales of roughly $21 million as of June.
The company has now taken its first outside investment, an infusion of $21 million from Index Ventures, a venture capital firm that also has investments in ASOS, Net-a-Porter, Moleskine and Nasty Gal. As Deane says, it’s a big step forward. So why take on an investor now?
“I think there’s some parity with Nasty Gal, which also has Index as a backer,” Deane says. “[Sophia Amuroso] didn’t need the funding either.”
Sometimes, investors are about more than cold hard cash. Deane says she wasn’t in a rush to find a backer and took her time finding a team that could help Cambridge Satchel Co. reach its growth goals. Index, with whom she was in talks for two years before closing the round, has a roster of high-growth portfolio companies that Deane says made her feel more comfortable about taking the investment. Many of them run up against the same kinds of questions that she has with Cambridge Satchel Co. and could be good sources of advice in the future, she explains.
Index brings to the table experience in running e-commerce — and specifically fashion — businesses, says Henry Davis, a senior associate at Index. It complements Cambridge Satchel Co.’s history as an online-native company. International growth is also a key part of the plan.
“We think this could be a very, very big company, but also a brand. That’s the key here,” says Davis.
Deane has some clear goals for the next year. A website redesign is in the cards, and she wants to bring on guest bloggers to build engagement. There’s also potential for a new store opening in the next 12 months. And she wants to double sales.
“It’s an ambitious target. I think that by trying to push into new markets digitally, it would be possible,” Deane says.
That would mean focusing on one market and delivering strong customer service, she says, rather than trying to dip into multiple markets for the sake of rapid expansion.
Despite these sizable growth goals, Deane wants to avoid developing an overly corporate culture as the company grows, staying true to the brand’s roots as an operation that she and her mother ran from her kitchen.
“As you grow, there’s a tendency to become more corporate. I don’t want to suddenly appear that we approach customers with suspicion, asking for an order number and the date of the thing. Keeping the personality of the brand is something I really strive to have,” she says
At this point, 65 percent of all sales come from online, with 15 to 20 percent coming from Cambridge Satchel Co.’s stores. The company operates shops in Covent Garden and Cambridge, along with a pop-up in East London; they also sell through retailers like Harrods, Selfridges, Lane Crawford, Neiman Marcus and J.Crew.
Of the Cambridge Satchel Co. stores, the Covent Garden location has performed the best, far outstripping expectations. In addition to functioning as a shop, the storefront is home to a dedicated space for bloggers to get a cup of coffee, write and charge their phones. Founded one year ago, it’s also a way to give back to Deane’s first supporters.
“Bloggers are the people who launched my business. Without the help of the blogging community, my business wouldn’t exist,” Deane says. “I remember going to fashion weeks and seeing them, and some of them would be on the curb typing away, or they’d be standing in the corner trying to get a WiFi spot.”
Deane is also appealing to bloggers with a bag loan program not unlike a public library. They can take a bag out, wear it around and return it before testing out a new one. This unique arrangement was developed in part because Deane is against the idea of disposable fashion; it’s also great marketing, since it allows Cambridge Satchel Co. to put more styles on bloggers’ arms.
It’s difficult to get cynical about Deane’s motivations, though: This company is her baby, and she’s in it for the long haul.
“I’d love it to be a brand that is accessible to people, but that they know stands for a timeless style and really good craftsmanship,” she says. “And also one that always does things in a really ethical way that they can be proud to be associated with.”