With IPO on Hold, Gilt Groupe Raises $50 Million Investment

Gilt Groupe just got some breathing room.

The online retailer, which sells fashion apparel at discount prices in so-called flash sales, has raised a new investment of around $50 million, multiple sources told Re/code. Gilt spokeswoman Jennifer Miller confirmed the financing and said it was led by current investor General Atlantic, with participation from other Gilt investors and a new strategic partner.

The new infusion of cash comes as Gilt has put off an IPO that some company insiders thought would take place in late 2014, as we previously reported. The company appears to be in limbo, and though it never announced its IPO plans, it hired Goldman Sachs and was gunning for a public offering last year.

“What we’ve always said is [an IPO is] likely at some point,” Miller said, “but two things need to happen: We need to show consistent growth and profitability and market conditions have to be right.”

None of those things seem to be lining up for Gilt right now. While the company has made some progress under CEO Michelle Peluso, Gilt is still not profitable and sources say its quarter-to-quarter performance hasn’t been consistent enough to convince leadership it’s ready for the scrutiny that comes with being a public company.

Gilt is also carefully eyeing the weak performance of fellow flash sale company Zulily, which went public toward the end of 2013. The company, which sells kids and casual women’s clothing, lost 64 percent of its market value in the past year after a slate of weak earnings reports. And while there are many significant differences between Gilt and Zulily, many investors are likely to compare the two.

Gilt, which has now raised somewhere around $300 million since it launched in 2007, will use the funding on increased marketing and international expansion, the spokeswoman said.

This article originally appeared on Recode.net.

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