VCs Order $10 Million for Wedding-Registry Startup Zola

Shan-Lyn Ma, co-founder and chief executive of Zola

Zola Inc., an online wedding-gift registry founded by former Gilt Groupe employees, raised $10 million in Series B funding in its bid to compete with Macy’s, Williams-Sonoma , and other registry destinations, VentureWire has learned.

The New York startup has set out to develop a sustainable online-shopping business model, something that has eluded plenty of traditional and upstart players in the market. Zola is consciously avoiding the flash-sales model favored by Gilt and others, for example.

Canvas Venture Fund led the new round, with Thrive Capital returning to reinvest. Several seed funds made an unusual later-round investment here, including AOL Inc.’s BBG Ventures, Female Founders Fund and Forerunner Ventures.

About 100,000 couples have used Zola for wedding registries, requesting wine-tastings, cash, and traditional home goods, since its launch in October 2013, said Shan-Lyn Ma, co-founder and chief executive, formerly senior director of product management at Gilt. Zola expects to sell $40 million of goods and services this year, up from $8 million last year, she said.

The company has learned from troubles at other e-commerce startups, Ms. Ma said. Like a large store, Zola has a customer-service department and curates the goods it sells. But the company doesn’t hold items in inventory, a cost that can be onerous. Instead, Zola works directly with manufacturers, such as Cuisinart, that ship directly to the couples.

Zola has been able to get a cut of about 40% on the purchase price for products and about 20% for experiences, Ms. Ma said. That is in line with traditional retailer splits and much higher than affiliate fees collected by shopping marketplaces, she said.

Ms. Ma co-founded Zola with Nobu Nakaguchi, formerly senior director of user experience at Gilt, and Kevin Ryan, co-founder of several New York startups, including Gilt, Business Insider and MongoDB.

Read the full article on Zola’s approach in VentureWire.

Write to Yuliya Chernova at Follow her on Twitter at @ychernova