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Investors are pumping $25 million into millennial wedding registry startup Zola

Lightspeed Venture Partners led the round

The Zola Townhouse in New York City
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

When Shan-Lyn Ma started Zola, there were several characteristics of the wedding registry industry that got her excited about launching a startup in the space.

There was built-in demand for the product, since most couples who are getting married sign up for a registry. There was the chance for great word-of-mouth marketing, since the wedding attendees who typically buy gifts off of a registry would be exposed to the service. There was also an opportunity with an online registry to cut out inventory costs, by having brands ship gifts directly from their warehouses to a couple’s home. And, of course, the top competitors in the space were old-school retailers who were experiencing declining foot traffic.

Turns out investors are excited about the business for a lot of the same reasons.

Lightspeed Venture Partners, the VC firm that has backed breakout e-commerce companies like Stitch Fix and The Honest Company, recently led a $25 million investment in Zola. Lightspeed partner Alex Taussig is joining Zola’s board.

In an interview, Taussig cited many of the above reasons, but also said he was impressed with how capital-efficient the company has been to this point. Zola is on track to register $120 million in gross sales over the next year, but has spent only $10 million over three years to get there. The startup also runs a relatively lean operation for an e-commerce company of its size, with 52 employees. Ma said the company will probably add just 15 new employees over the next year.

Taussig was also attracted by the founding team, all of whom worked together previously for many years at Gilt Groupe. Gilt co-founder Kevin Ryan is also one of Zola’s founders.

“When you spend time with them, you realize they all really speak the same language,” Taussig said.

Zola was founded in 2013 and lets couples choose from over 40,000 products for their registry. Couples can also accept cash gifts through the service, as well as “experience” gifts such as Blue Apron meal kits and SoulCycle classes. On average, the company takes a cut of about 40 percent for gifts purchased through Zola.

In an interview, Ma said the company will spend a chunk of the new money on the startup’s first paid marketing campaign of significance. While awareness for Zola is strong among a certain demographic of millennials, it is still a very long way from being a household name compared to competitors like Macy’s and Bed Bath & Beyond.

Zola is buying ads in a variety of bridal publications and will also test out subway ads in New York City. The CEO was skeptical of joining the hordes of startups promoting their services on the trains, but was convinced to give it a try by other New York City founders.

“We’ve been talking to almost every startup we can find to understand what they’ve seen, and the response we’ve heard was overwhelmingly positive,” she said.

Zola also plans to open up brick-and-mortar pop-up locations in Nashville, Los Angeles and Dallas over the next year, where couples can take a look at a selection of the items that brands sell through Zola’s website and app. The startup already operates an appointment-only space in New York City.

TechCrunch previously reported news of the round, which it said values Zola at $200 million.

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