Two-year-old startup Jenzy, which set up shop in South Philly after completing the Philly Startup Leaders accelerator in 2018, has raised $1.25 million in seed funding, the company announced at the end of 2019.
Cofounders Carolyn Horner and Eve Ackerley started the company, which created a kid-feet-sizing app for parents to get their children into new, accurately sized kicks, in 2016.
Their business model involves connecting parents to an ecommerce platform that, on the one hand, helps parents ensure they’re getting the right size; and, on the other, gets sales and reduces return rates for retail brands. Parents can take a photo of their child’s foot in the app, and are given recommendations on shoe brands and sizes for a perfect fit.
Until now, Horner and Ackerley were the company’s only full-time employees. The pair met while teaching abroad in China and briefly lived in California with Ackerley’s parents while figuring out the next move. Horner said once they narrowed down their focus to children’s shoes, they had eyes on Philadelphia, near her nieces and nephews — and PSL’s accelerator program.
About two years later, the $1.25 million raise, led by Morgan Stanley’s Multicultural Innovation Lab and followed by eight angel investors, will allow the pair to hire the handful of contractors they’ve used for marketing, customer retention and growth full time. (The company currently lists a customer success and ecommerce manager role on its site.)
Horner and Ackerley participated in the Multicultural Innovation Lab this year, which includes a curriculum of finance and sales strategy, marketing and branding, and private sessions with industry experts. Horner said when the pair was looking for seed investors in the company heading into 2019, Morgan Stanley became a natural fit.
“We knew Morgan Stanley would be an excellent lead investor because they contributed not only capital, but also six months of exceptional mentorship and support as a part of their investment,” Horner said.
“It has been extremely rewarding to be a part of Jenzy’s growth journey through our Lab,” said Carla Harris, vice chairman, managing director and senior client advisor at Morgan Stanley, in a statement. “Carolyn and Eve have proven themselves to be disruptors in the ecommerce space with an innovative approach to build and scale their brand.”
The money will help the team of two grow to up to eight in the next few months, Horner said. Two of the hires will continue to be remote workers, but the others will join Horner and Ackerley at their office near 12th and Catherine streets, which has studio space where customers can sign up for 30-minute appointments to get fit tested.
“We’ll be going into 2020 with runway, which is really exciting,” she said. “It took us a year to raise it, but we know we can do it, and we can do it again, and that is a big boost of confidence for us.”
It also showed that the shoe sizing app had a place in the market, Horner said.
Jenzy released a second version of the app in May 2019, and the brand has experienced 50% month-over-month sales growth, Horner said. It’s also since held more than 25,000 app-sizing sessions and has maintained a shoe return rate of 14% — half of the industry average of 30%, the company said in its announcement.
Fundraising to get to $1.25 million took pitches to over 1,000 people, Horner said. Here’s her advice for other early-stage companies looking to fundraise this year:
- “Learn quickly what metrics are most important to the stage of your company and your industry. For example, as a seed stage consumer startup, investors were most focused on our team, market size and sales traction. We know, however, for our next round that we need to have really strong numbers around CAC [Customer Acquisition Cost], LTV [Lifetime Value] and retention.
- “Also, know what your ‘non-negotiables’ are. We had investors ask us to move cities, or add non-standard clauses to our term sheet. In the beginning, we spent a lot of time doing a cost-benefit analysis for things that we should never have spent much time thinking about. It’s important to be flexible with your terms, especially with the first few, large investors, but ultimately you’ll save a ton of time by knowing if an investor just isn’t going to be a great fit to begin with.
- “Finally, ‘running ads on Facebook’ is NOT a marketing plan. For consumer businesses, having a unique and scalable marketing plan that doesn’t include spending $100K/month on Facebook shows creativity and thoughtfulness. While our marketing plan includes things like PR and digital ads, we also talk about partnerships with daycares, sponsoring ‘fun runs’ and partnering with influencers. These topics were not only fun to talk about, but left investors thinking, ‘Oh, that’s such a cool idea!'”
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