Before the pandemic, companies that opened brick-and-mortar stores for digital-only brands seeking a physical presence were all the rage. Neighborhood Goods, Showfields and others had their moment in the sun, but now most of those companies have disappeared — except for Leap.
The business was founded by Amish Tolia, chief executive officer, and fellow entrepreneur Jared Golden in 2018 with $3 million in seed money from Costanoa Ventures, Equal Ventures and Brand Foundry Ventures. It secured another $50 million in series B financing in 2022 and $15 million in series A funding the next year.
Now it has revealed another $20 million infusion from Tribeca Venture Partners and DNX Ventures, along with existing investors.
Tolia said the additional funding will “enable us to accelerate our growth and enhance our operations and technology as we continue to onboard premium brands and strengthen our fleet across markets.”
Leap operates more than 100 stores in 12 markets for brands including Grown Brilliance, Ring Concierge, Godiva and Malbon Golf.
At the same time, Tolia said, Leap has added former Neiman Marcus CEO Karen Katz to its board of directors. Katz spent 33 years at the Neiman Marcus Group, including eight years as CEO. During her tenure, she is credited with growing the company’s digital presence and helping to launch its omnichannel strategy, while also leading the acquisition of German e-tailer Mytheresa.
Katz is currently chairman of the board of The RealReal and has been on the board of Under Armour for more than a decade.
Although Leap had a couple of lean years after the pandemic, things turned around last year and the company is now profitable, Tolia said. “It’s been a turbulent environment,” he said, adding that there was “so much COVID-19 hangover,” but the climate is better today and Leap has been able to “build a more-sustainable foundation. We’re encouraged with our progress.”
While some of the direct-to-consumer brands it had worked with in the past are no longer clients, Leap has added other businesses including Frankies Bikinis, Hanky Panky, Paper Planes and Sweaty Betty.
The way the platform works is that once a brand signs on to work with the company, Leap finds a location, rents it, hires the employees, installs the point-of-sale systems, and partners with the brand to build a distinct retail experience. Once the store is up and operating, Leap takes a performance-based percentage of sales as its fee.
“Brands continue to see the value in brick-and-mortar, as they strive to meet their customers with immersive shopping experiences in the markets where they already have a strong following and can build loyalty with newly acquired customers,” Tolia said.
He said the goal is to increase the number of stores it operates to between 130 and 150 this year as it works to further scale its business.
Tolia pointed to Katz as key to helping Leap reach those goals, citing her “deep luxury and retail experience [that] will undoubtedly help propel us further toward our vision and support the growth of our platform and our brands.”
