Mallzee gets £2.5m stamp of approval from Royal Mail
"Tinder for fashion" app founder Cally Russell turned down a £75,000 Dragons' Den offer in February
Mallzee, a shopping app described as the “Tinder for fashion”, has secured £2.5m in funding round led by the Royal Mail with participation from the Scottish Investment bank, Par Equity and angel investors Gareth Williams and Rob Dobson.
Featured in the Startups Twitter 60 must-follow businesses, Mallzee’s app allows users to swipe through and purchase products from over 100 major retailers and independent boutiques.
Launched in 2013, the company – which claims to be currently generating revenue in the hundreds of thousands – takes a small commission from each sale and charges retailers a fee to be featured on the app.
The deal is the culmination of two months of negotiations for founder Cally Russell who initially set out to raise £1m. Russell will use the funding to double staff from 15 to 30, and is aiming to hit one million users by the end of the year.
Russell had appeared on Dragons’ Den in February pitching for £75,000, but turned down Peter Jones’ offer of the full amount for 15% of the business when he told him Mallzee was “either a £100m business or nothing”.
As well as the postal service taking a significant stake in the business, Royal Mail’s Nick Landon will become a member of Mallzee’s board.
Mallzee’s Russell commented: “We set out to raise £1m but there was significant interest in the round, so we settled on £2.5m. We’re still pre-profit but we’re pretty damn close now. We expect to be in profit in the second quarter of next year.”
A Royal mail spokesperson said that its investment will help it tap into “high-growth revenue streams up the value chain. It helps align the business with the rapid growth in consumer purchases made from mobile devices and developments in shopping apps.”
Read more on Mallzee’s Dragons’ Den appearance here.