Burrow Raises Additional $14m to Expand Modular Furniture Company
Burrow just raised $14m in Series A led by New Enterprise Associates. Chestnut Street Ventures interviewed the founders about their newest fundraise and what it means for their furniture business.
In the summer of 2015, Burrow co-founders Stephen Kuhl and Kabeer Chopra felt the real pain of buying new furniture when they moved to Philadelphia to attend Wharton. Stephen suffered through the IKEA experience, while Kabeer ended up dragging his West Elm sofa on a cart from the store to his apartment to avoid a $250 shipping fee. They felt that there had to be a better way to buy high-quality furniture. So they started digging.
Stephen and Kabeer found that the size of a sofa was the biggest contributing factor to a high cost. It also impacted the delivery process and took longer to arrive. So they reverse-engineered a luxury sofa to fit in a few lightweight boxes that could then be shipped directly to the customer. In doing so, they were able to remove up to 70% of the standard shipping costs while still delivering a luxury, comfy, and stylish sofa within a week.
With Burrow’s newest $14m Series A led by New Enterprise Associates, we decided to check in with the co-founders of one of Chestnut Street Ventures’ earliest investments and ask how this new round of funding would fuel their future plans for furniture domination. Because it doesn’t matter if you live in an apartment or a house; you shouldn’t have to overpay for your sofa and suffer through a poor experience.
Is Burrow nationwide right now?
Not only are we made in the US, but we have also shipped to every single state outside of Alaska and Hawaii!
Who is your customer?
Our customer is the modern consumer, ranging in age from early 20’s to late 60’s. They shop online, expect fast and free shipping, and care about the story behind the products they buy. They want high-quality, designer furniture in their homes without breaking the bank or suffering through a painful experience. While many of these customers end up living in cities, we do have customers in each of the 48 continental U.S. states.
What sets you apart from your competitors?
There are three main differences that set us apart. First and foremost, you can get a Burrow sofa much faster than anything at either of top competitors, and you’ll be able to easily move it into and out of your home. Just as easily as you can assemble a Burrow sofa (no tools, just a few minutes), you can disassemble it and move it with you. Second, if your space changes, our modular design allows you to adjust the size of your sofa to adapt to your new space. Third, with our simple, online customization experience, you can create over 1000 combinations of our sofa with just a few easy selections. All of this without sacrificing quality for cost.
Have there been any pivots with your business model?
No changes yet. Later this year we’ll launch additional products, but our plan has always been to grow into a home lifestyle brand. It was important to start with the couch as it’s the center of the living room, and the best product to establish our brand with.
What is the best feedback that you’ve received from a customer?
Customers continue to rave about the level of service they receive from us. We’d like that to always be the case. We digest all the feedback we receive and have made several product and experience improvements accordingly.
How did the investment from NEA come about?
We were introduced to Tony Florence (partner at NEA that joined our board) by Red & Blue Ventures, who led our seed round. Tony had invested in Casper, Jet.com, and many other successful eCommerce companies. He saw a similar potential in us, and personally we got along great with Tony. It was an easy process on both sides from there.
What do you plan to use the additional funds for?
We’re aggressively building out our team and testing and scaling several marketing channels. The faster we grow, the faster we’ll learn from our customers how to create the best products and experiences in the home.
Any new product launches in 2018?
In 2018, we plan to make progress towards our goal of making the perfect couch and experience for purchasing furniture. Progress towards this goal will be made through releasing decorative pillow and throw options that can pull together your living room, other fabric choices, and a few new innovative items that we can’t talk about yet :)
Do you see another round of fundraising in the near future?
Potentially, though hopefully not too soon.
What is your 5-year plan for the business?
Burrow plans to create the best experience around furnishing your entire home within a week. Every touch point from purchasing to lounging will be both memorable and pleasant.
Speaking of pleasant…here’s a dog relaxing on a Burrow sofa.
Chestnut Street Ventures is a network of Penn alumni investing in Penn-connected businesses. Click here if you’d like to learn more about venture investing with Chestnut Street.