Lesara, a once very fast-growing online store for trendy and affordable fashion and lifestyle products, just filed for insolvency at its headquarters in Berlin. Founded in 2013, Lesara employs a team of about 300 people and was able to raise a total of about €85 million in funding. It now seems as if investors did not want to invest further capital in the growing but unprofitable business. A urgently needed €10 million bridge financing round was canceled, and the company therefore had to file for insolvency.
All this comes as a big surprise, since Lesara was announcing good news regularly, seemed to close funding round after funding round in an easy manner, and the founder and CEO Roman Kirsch also just spoke at the Noah conference in London about big plans and big opportunities.
The business model of Lesara is to offer trendy but cheap fashion and lifestyle products, which the company bought directly from manufacturers and suppliers in China. Lesara’s online store was already targeting 10 European countries.
In hindsight it looks like the company was a bit overinvesting in marketing in the past years to push revenues, while not paying enough attention on customer lifetime value and the company’s path to profitability.
We hope that the Berlin-based company might still be able to achieve a turnaround. Not only for the investors involved, but more importantly for the roughly 300 employees.