The story of Fab can be summed up in one word: pivot.
The company launched in 2010 as a social network for gay men. In 2011 it pivoted to a furniture and design e-retailer valued at $1 billion just over a year ago. And now it has [involuntarily] pivoted to a shell of a tech giant in need of rescue.
Multiple sources have confirmed to TechCrunch that Fab is in early talks with Irish company PCH International about a deal of somewhere between $15-$50 million. The $1 billion evaluation was made in July 2013, after the company had raised $150 million in funding. It had plans to raise another $100 million to last them through 2015, but the extra change never materialized.
The past year has been anything but fab for the e-retailer, which originally subsisted on a flash-sale business model. Last November, cofounder and chief design officer Brad Shellhammer stepped down from the company. Fab was reportedly burning through $14 million per month on logistical costs, and by the end of the year, it had laid off 400 of their 700 employees.
Fab CEO Jason Goldberg wrote a revealing post on his now defunct blog, “Betashop,” in February of this year, admitting that Fab had lost its way. He talked about how the company “became a media darling overnight,” grew revenue by 500%, and how it had started “to dream in billions” instead of taking things day by day.
Then in April of this year, Goldberg sent out a company-wide memo with an arrogant startup attitude that was riddled with profanity. It was an attempt to raise morale after the extreme layoffs, but sounded more like a surrender.
“In the history of startups I bet you can count on one hand the number of companies that went from $0 to $1B in valuation in just 2 years and then voluntarily cut their operating expenses by 2/3 and then rose to greatness again,” he wrote. “Will Fab be able to do it? We’ll see. There are days when I’m certain we will. There are days when I question if we can. I’ve had VC after VC tell me that they’ve basically assumed Fab is going to die; for how in the world can a company possibly survive 3 rounds of layoffs and cost cuts as we’ve had?”
In one final attempt to make yet another pivot, Goldberg launched Hem this past July, a new furniture e-retailer featuring European designers. Goldberg even moved to Berlin to helm Hem, and told Fast.CoDesign at the time, “We are excited to shake up the home furnishings space and believe we have just the team to do it.”
But it seems they didn’t shake hard enough, and a source told TechCrunch that “no one really works at Fab anymore.” By Goldberg’s count, there were 25 full-time staffers left in July. The irony is that in October, speaking at TechCruch Disrupt in London, Goldberg said: “I didn’t start [Fab] to sell it, I started it to build a great e-commerce business.”
Despite his original intention, it looks like the Fab show is over.