Zappos.com received an additional $15 million round of equity funding from Sequoia Capital, a technology-based private investment fund that has been involved with several internet companies, including Google, Cisco Systems, Kayak.com, and PayPal. The funds will be used to support the company's rapid sales growth and to improve the on-line customer experience. Zappos.com is expecting to surpass $300 million in gross merchandise sales this year and recorded $184 million in sales last year and $70 million the year prior. The additional $15 million brings Sequoia Capital's total investment in Zappos.com to $35 million.
In addition to the new funding, Zappos.com was named the number one fastest growing internet retailer with a 163% jump in 2004 sales by the trade publication Internet Retailer. Management reportedly attributes much of their growth to customer loyalty spurred by better service. While Zappos does have a marketing budget, management prefers to spend money on free expedited shipping and free returns in order to give their customers the best experience.
The second fastest growing on-line retailer was West Marine, with 124% growth to $86.8 million. Other retailers on the list include Overstock.com, Northern Tool and Equipment, and eBags.com.
