Victor Tam, who cofounded the Vancouver-based luggage startup Monos in 2019, had hesitations about raising venture capital. He’d observed many popular direct-to-consumer brands—like Away, Allbirds, and Glossier—get enormous rounds of funding, grow their revenues, but then ultimately struggle to turn a profit.
Still, in 2022, travel was poised to bounce back after the pandemic. Tam wanted to make sure he had enough cash to meet the potential influx of demand, so he raised a total of $40 million in two rounds. By the end of the year, however, he hadn’t spent a dollar. “The entire amount is still sitting in our bank account,” Tam says. “It was interesting to go through this experience raising growth capital, only to realize that we didn’t actually need the money—at least, the way that we’re running our business.”
Tam represents a new generation of founders who are building their businesses differently from the hot, digitally native startups that popped up a decade ago. He’s prioritized profitability over growth, ensuring that brand has remained in the black from day one. But he’s nonetheless managed to scale quickly. Monos generated a million dollars within six months of launching and brought in upwards of $100 million last year, an increase of more than 300% from the year before.
The Away Effect
Tam has said that many people first discover Monos by hearing about its biggest competitor, Away. When Away first launched in 2015, it seemed revolutionary. For decades, suitcases were a boring, functional commodity. But founders Steph Korey and Jen Rubio believed they could transform the category by creating a fun, immersive brand around suitcases, and selling them online.
In many ways, the strategy worked. Away grew quickly, largely due to enormous rounds of VC funding. By 2019, it had scored more than $180 million in seven rounds, valuing the company at $1.4 billion. Away’s distinctive, colorful hard-shell cases became ubiquitous throughout airports around the world. And the brand paved the way for many other direct-to-consumer suitcase brands, including Paravel and Roam.
It inspired Tam, a serial entrepreneur who previously founded furniture brand Rove Concepts, to launch Monos together with his two childhood friends, Hubert Chan and Daniel Shin. “Away did an amazing job of shifting the way luggage felt to consumers,” Tam says. “And it seemed like there was still room in the market for travel brands.”
But as Tam was building Monos, Away began to hit a series of challenges, including an exposé about toxic workplace culture and then a massive decline in sales when the pandemic halted travel. And yet, Away is still on the hook to its investors, who are looking for a return. Earlier this year, Bloomberg reported that Away was exploring a possible sale.
Tam decided that if Monos was to succeed, he would have to take a different approach than the early DTC upstarts. “We would see that Away and Warby Parker raised hundreds of millions of dollars, and we idolized them,” he says. “But then, when we took a closer look, it was clear that they were being run like software companies, burning through a lot of money without making a single dollar. We wanted to take a different route. We were inspired by long-term, generational brands, like those within the LVMH portfolio.”
The Devil’s In The Details
While Tam focused on growing profitably, Chan, a designer by training, focused on the design of the suitcases. He believes that the key to having staying power as a brand is creating a suitcase that consistently performs. He is inspired by the quality and minimalist design of Rimowa, the 125-year-old German luxury brand whose aluminum and plastic suitcases have garnered a cult following. But with a starting price of nearly $1,000, most people can’t afford Rimowa.
Chan set out to create a well-made polycarbonate suitcase with prices starting at $225. And he spent time on the details. For instance, when creating the telescoping handle for the suitcase, he found it annoying that most brands—including Rimowa and Away—require you to push down on a button at top to pull it up or down. “It’s not intuitive or ergonomic,” he says.
So Chan set out to put the button on the underside of the handle, so that you could more easily pull it up or down while grasping it. However, this meant that Monos couldn’t use off-the-shelf components available to the factory; they had to design it from scratch, using a custom mold. They ended up creating many custom components of the suitcase, including the inner fabric lining and compression pads inside. This made the design process more expensive and laborious; but in the end, the founders believe this is what will allow the brand to stand out.
On the other hand, if Monos creates a durable, well-made suitcase, customers won’t need to buy another one for a long time. So the brand’s strategy is to create a universe of products that make traveling easier. It has launched duffles and backpacks that slide neatly onto the suitcase, along with packing cubes and toiletry bags. More recently, the brand has launched clothing specifically designed for travel, including a new linen collection.
This summer, Monos opened its first brick-and-mortar store in Vancouver, which is meant to introduce new consumers to the brand. In keeping with Monos’ aesthetic, the store is minimalist, with lots of open space with large windows, concrete floors, and a wall of exposed brick. The brand now has a Toronto store in the works, but as with everything else, Tam is being deliberate about expanding Monos’ fleet of stores. The company still hasn’t spent any VC money on retail stores yet, but they might at some point soon. “The capital we now have in the bank allows us to make good decisions,” Tam says. “We’re not forced to do anything; but at the same time, when we find opportunities, we can lean into them.”
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