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On
June 27, 2006, Sequoia Capital, a leading venture capital (VC)
firm in the US, announced that it had completed a US$ 6 million
Series B round of funding for Stardoll.com. Earlier in February
2006, Index Ventures, a leading European venture capital firm,
and a few angel investors had invested US$ 4 million in
Stardoll.com as Series A investment funding.
Sequoia Capital and Index Ventures were two of the most successful venture capital firms in the dot-com space, having invested in successful ventures like Yahoo!, Google, YouTube, Skype, and PayPal.
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Stardoll.com (formerly known as Paperdoll Heaven) is an online celebrity dress-up and community site, mostly popular among teenage girls across the world. The site offered those who registered as free members over 320 dolls and thousands of garments and accessories.
For about US$ 3 a month, paid members could get access to "Superstar" dolls, and special clothing and designer collections. Most of the site’s members were between the ages of 7 to 17 from over 190 countries. The site was also popular among older girls and women.
Stardoll.com is based in Stockholm, Sweden. It was founded by Liisa, a retired woman, who in her late 50s decided to start this venture as she had a passion since childhood for paperdolls. Liisa used to draw the dolls and the different garments for their wardrobes. She also taught herself web designing. Soon, her personal homepage became popular with teens and in 2004, she upgraded her site and named it Paperdoll Heaven.
Liisa said, "I wanted to create a positive online environment for young girls who are creative and interested in fashion. They are looking for alternatives to shoot'em up and kill'em up games. Most online sites are focused on violence and competitiveness.
Stardoll.com encourages creativity and community in a safe environment for young girls and teenagers."
Stardoll.com said that through "word-of-mouth", the company had built up a global base of over 900,000 members. The website (www.stardoll.com) attracts over one million unique visitors a month.
Danny Rimer, general partner, Index Ventures, said, "Stardoll.com is a web phenomenon. When we saw the website we immediately knew Liisa was hitting a nerve and serving a previously ignored audience."
Mark Kvamme of Sequoia Capital said, "We were impressed with the exponential growth of Stardoll and the sheer number of young people moving online to enjoy this pastime."
Analysts opined that the funding of Stardoll.com by Sequoia Capital and Index Ventures showed that VCs were keen to bet on the growing popularity of online social community websites that had the potential to attract millions of members. Some of the successful online social community websites were Myspace.com, Orkut, and Facebook.com .
Even marketers were keen to tap into the growing popularity of online social communities. For instance, in March 2006, Nike, Inc. (Nike), the world’s largest athletic shoe manufacturer, and Google announced the launch of Joga.com, a social networking website for football fans across the world. This was part of Nike’s "Joga Bonito" (Play Beautiful) campaign, a global marketing initiative launched during the build up to the 2006 FIFA World Cup that was held in Germany from June 09, 2006 to July 09, 2006.
For the future, Stardoll.com planned to launch a new service called "Me Doll" where in the members could dress-up avatars of their own self or wear their own designs. In addition to gaining revenues from membership services, there were also opportunities for marketing tie-ups with leading fashion brands and retail stores. The company also said that it would focus on branding and marketing efforts to increase the popularity of its services.
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1] Series B refers to the second round of venture capital investment funding.
2] Series A refers to the first round of venture capital investment funding.
3] “Stardoll.com Closes US$6m Series B Funding Led by Sequoia Capital and Adds Prominent Entertainment Industry Lawyer to Board,” http://www.prnewswire.co.uk, June 27, 2006.
4] www.stardoll.com
5] http://www.stardoll.com/about/sections.php?section=aboutStardoll
6] http://www.stardoll.com/about/sections.php?section=aboutStardoll
7] “Index Ventures Invests US$4 Million in Stardoll.com,” http://www.prnewswire.co.uk, February 16, 2006.
8] Stefanie Olsen, “Online dolls get $6 million to spend,” CNET News.com, June 27, 2006.
9] MySpace.com is a social networking website that offers an interactive network of blogs, user profiles, groups, photos, and an internal e-mail system. As of July 2006, it was the world’s fourth most popular English-language website and the sixth most popular in any language, according to Alexa Internet (Source: www.en.wikipedia.org).
10] Orkut.com is an online social networking service provided by Google.
11] Facebook is a social networking service for high school, college, university, corporate, non-profit, military and geographic communities, primarily in English-speaking countries.(Source:
http://en.wikipedia.org/ wiki/Facebook).
12 "Nike and Oregon City Hope to Get Along Again," http://www.iht.com, October 02, 2006.
13] Also known as association football or soccer.
14] The FIFA World Cup (commonly referred to as the football World Cup) is an international football competition contested by the men’s national football teams of member nations of the Fédération Internationale de Football Association (FIFA), the sport’s global governing body. The event is held every four years.
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