Queenly, a startup building a garment marketplace aimed at dressing women for formal events, announced this morning that it has purchased Mi Padrino.
Queenly's product supports an event where girls celebrate their fifteenth birthday with a large event and ornate garb. The deal caught our attention because of the youth of Queenly.
Is the current market downturn going to cause startup-on-startup M&A activity? One data point that supports the thesis is the Queenly deal.
We've had our eyes on Queenly since it was part of Y Combinator. We got on the phone when it told us that it had purchased something. Talk about it.
The status of Queenly's formalwear-focused startup was the subject of a conversation with the company's CEO. Bantigue wrote an essay about the mental health impacts of building a startup for Fortune in the year 2022. We wanted to know how the company is performing and why it is buying another startup so young.
Will the corporate venture boom lead to an M&A frenzy?
Things seem to be going well at the company. It is expected that Queenly will post rapid growth in recent quarters as COVID fades in consumers' minds and formal dress events return to our calendars. It's correct. Queenly's business has doubled from the fourth quarter of 2016 to the second quarter of this year.
Growth doesn't all come from the company's original business Queenly has expanded its model. It works with smaller brick-and-mortar stores that don't have a digital presence and has deals with some clothing brands to sell directly through its website. According to Bantigue, the majority of Queenly transactions are resale, with 15% coming from small-business partners and 10% from designers themselves.
Queenly was linked to Mi Padrino by an investor. Bantigue was made aware that it was for sale. Queenly didn't expect to buy another company so early in her startup's life, but after months of research and hammering out the deal, she did.
In this case, we're not too upset about the terms. What's the reason? Mi Padrino had contracted to a small scale by the time that Queenly bought it. Queenly is keeping Mi Padrino's dress focused business, leaving the rest of what it acquired behind it. DJ and photographer recommendations are useful, but don't fit in with what Queenly does.
What is the purpose of the sale? It looks like brand, content, and history. The Mi Padrino brand is better known in Hispanic circles than Queenly and it has a library of content that could help bring in more customers. Queenly gets a deeper hook into a large formalwear market that could help it keep up its growth.
Queenly is working on a brand ambassador program for the upcoming school year, as well as a community aspect to its business that it likened to a beauty store. Kathy Zhou is building a reverse image search that will allow users to bring an image of a dress that they love to Queenly, which will allow them to find and buy it.
The market for used clothing is growing. Despite some issues at Rent the Runway, it is clear that technology will have a long-term home there. Let's see if Queenly can grow quickly in the back half of the decade.
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