Deena Varshavskaya struggles to contain her excitement as she talks about her Squishable, a stuffed-fox key chain attached to her purse. “I mean, he is so cute!” She coos. “But it’s the quality,” she adds gravely. “So well made.” Naturally, Varshavskaya, 33, stumbled upon the quirky accessory while browsing Wanelo, the online-shopping platform she founded in 2010.
Wanelo — a compression of “Want, Need, Love” — is a social network for online-shopping addicts, combining the hallmarks of Pinterest and Twitter. Here’s how it works: Users upload images of products they want (or need or love). Members can follow other users or brands and cultivate their favorite items by “saving” a picture — Wanelo’s version of “pinning.” Each image has a “buy” button that leads to a page on, say, J.Crew.com or trendy e-tailer NastyGal.com, where the item can be easily purchased.
This combination of collecting and shopping has young women flocking to the site. In a recent Piper Jaffray survey, teens wrote in Wanelo as their favorite social network — above new sites like SnapChat. The company has 8 million registered users — up from 1 million last November — 70% of which are active monthly.
Siberian-born Varshavskaya dropped out of Cornell University — just two classes short of graduation — and in 2003 started an online casting directory. In 2006 she founded Dynamik Interactive, a design firm. Her stint as CEO of Dynamik overlapped with the first months of Wanelo, but she officially left the company in early 2011.
The San Francisco-based startup raised $3 million last spring from First Round Capital, Forerunner Ventures, and others. A source close to the company confirms it raised an additional $11 million in its most recent round, valuing Wanelo at $100 million. The potential is obvious: Where other social networks rely on advertising to generate revenue, Wanelo can claim a piece of much more lucrative e-commerce sales. When a Wanelo user buys an item, the firm receives a portion of the sale. The company, which has 17 employees, is profitable.
Wanelo is now wooing different types of users. Recent improvements include updates to make the experience more tailored (so that men aren’t bombarded with popular Victoria’s Secret products, say) and a mobile app. It is also going after retailers, trying to persuade them to install Wanelo buttons on their product pages.
Hip new e-commerce sites have had a mixed track record. Once-hot outfits like Gilt and Groupon have had to reposition themselves after their initial novelty wore off. Forerunner Ventures managing partner Kirsten Green says Wanelo is different. “Many retailers are interested in this as a demand platform,” she explains. Varshavskaya’s ultimate goal? To make Wanelo a trend that never goes out of style.
This story is from the June 10, 2013 issue of Coins2Day .