CapX Invests $13 Million in Lifestyle Brand Karmaloop
CapX Partners closed on a $13 million senior loan facility to support the growth needs of Karmaloop, a multi-platform online retailer, community of style and media company specializing in global streetwear fashion and culture for men and women.
Over the past few years, Karmaloop validated its marketplace position and brand presence by growing top line revenue, reaching critical mass scale and exploring brand extension initiatives in media as well as niche acquisitions. Karmaloop’s goals for fiscal year 2014 are to enhance operating initiatives and maintain its leading market position.
“CapX favors industry leaders and looks for opportunities to fuel a company’s growth objective. Karmaloop has many compelling business characteristics whereby CapX believes they will achieve its long term constituency goals,” said Jeffry S. Pfeffer, CapX Managing Partner.
As a mature and expanding business, Karmaloop already had a well-defined capital structure at the time of CapX’s introduction. CapX consistently looks for growth opportunities that exhibit underwriting balance amongst cash flow, collateral, and business enterprise value. CapX appreciated Karmaloop’s improving operating metrics and had interest as a senior lender. Karmaloop’s Corporate Counsel, Burns & Levinson LLP, strategically introduced CapX to Karmlaoop management and its existing senior lender, Comvest Partners, to see if all parties could reach the common goal of more growth capital. The result was Comvest inviting CapX to equally share the total senior loan facility including a material increase to working capital. In addition, CapX was able to expedite its due diligence and close within the highly desired 30 day time frame.
“Karmaloop CEO Greg Selkoe and his team, along with the support of lead investor Insight Venture Partners, have built a dominant brand in the 18-35 year-old verge market,” added Stephen J. Healey, Managing Director of CapX Partners in Boston. “We worked with management and incumbent lender, Comvest Partners, to tailor a financing package to meet the needs of this growing company.”
“We are thrilled to have CapX as part of the investment team backing Karmaloop and are honored to have their support and confidence” stated Greg Selkoe, CEO of Karmaloop. “Steve and Jeff have already proven to be valuable partners above and beyond just capital.”
Headquartered in Boston, Massachusetts, Karmaloop has become a cultural force, with presence across the U.S. and in over 120 countries with 4 million unique visitors coming to the site monthly. Karmaloop embraces and advocates the convergence of underground fashion, music, art, and entertainment through multiple platforms such as online retailing sites, blogs, music, video and the first cable channel for Verge Culture. More than just an e-retailer, Karmaloop is a cultural hub for multi-cultural 18-35 year olds, trendsetters, and brand loyalists.
