N E W S   P O S T

“Stealth Mode” with a Billion YouTube Views: HaulerDeals Raises Secret $1 Million from Intelligent Beauty

For a super stealth company, HaulerDeals is certainly making a lot of noise down here in LA. The startup fashion video network may be cracking the online video holy grail: Ignoring advertising and monetizing through commerce instead. Investors in the know are going crazy trying to get in, according to multiple sources familiar with the situation.

HaulerDeals is a roll-up of 15 to 20 “Haulers” or fashion gurus with existing audiences on YouTube, Pinterest, and other social networks. Each week, the Haulers displays stylish looks, called “daily crushes,” from partner boutique brands at discount prices. Items generally cost less than $100 each.

The haulers have a cumulative four million YouTube subscribers and more than one billion total video views. Meh, no big deal. That’s just three-quarters of the population of China.

The company quietly raised $1 million in seed financing from Intelligent Beauty early last month. IB is the parent company to fashion, cosmetics, and diet system ecommerce juggernauts JustFab, DermStore, and Sensa. Naturally, HaulerDeals will be offering JustFab and DermStore products, among their upcoming “crushes.”

According to founder and CEO Kenn Hennman, two other institutional investors are expected to join the round in the coming weeks. A local VC I spoke to all but confirmed this saying, he is a “likely investor in the company” and thus couldn’t tell me much about the deal.

The most interesting wrinkle is that the company is not relying on advertising to drive revenue. It’s building a social commerce engine by letting people buy the clothes, accessories, makeup, and jewelry products that the gurus promote in its videos. The products are offered in either a flash sale along the lines of Gilt Groupe, or by subscription like Beachmint and JustFab.

“I think that’s the holy grail of this space, including Machinima, Maker, StyleHaul,” says an another un-affiliated VC I spoke to about the company. “Whoever figures out the commerce piece beyond just being an ad-supported network is going to be the big winner. If these numbers are accurate, I’m pissed as hell I didn’t hear about it.”

At this point, it’s still a big “if” whether they can crack that code. Many of the biggest incumbents have yet to succeed in integrating ecommerce to their nine-figure viewerships.

That said, if HaulerDeals’ view numbers are sustainable — and based on early results they’re not out of line — it’s no surprise people are excited. Many of the videos posted by the company’s gurus have gotten more than 100,000 views in their first 12 hours and top out in the multiple millions. Individual Haulers have hundreds of thousands of YouTube subscribers and as many as hundreds of millions of views.

These numbers are on the order of those produced by the biggest YouTube networks like Maker Studios and Machinima, who have been around for years and raised rounds at valutations above $200 million.

It’s an interesting model too. The “gurus” all have an equity stake or some form of revenue share based on the success of their style boutique and are under contract to conduct flash sale business only with HaulerDeals.

From what I’ve gathered, the company elected to “soft launch” as it works out the supply chain side of its business. Its first flash sales went live yesterday, kicked off by Dulce Candy’s video The Ultimate Summer Wardrobe which is up to 95,000 views after 36 hours.

Based on the buzz, expect more news coming soon, both on the financing front and on a louder push to attract users. This will be one to watch, and given the hoops investors are jumping through, I bet it’s got a sky high valuation too.