Santa Monica-based outdoor furniture startup Outer Inc. has raised $10.5 million in Series A funding. The round was led by Sequoia Capital China with participation from a host of other investors, such as music duo The Chainsmokers, via the band’s local venture firm Mantis Venture Capital; Twitch Interactive Inc. founder Justin Kan; Andy Katz-Mayfield and Jeff Raider, the founders of online shaving supplies company Harry’s Inc.; and Santa Monica-
based Mucker Capital.
Outer makes what it describes as sustainable and affordable outdoor furniture. The company says materials used in its products are 100% recyclable. Outer also touts its proprietary “OuterShell” furniture cover, which protects its sofas from the elements, as a key differentiator.
“(We) said from the beginning that we wanted to be known for materials science,” said Outer co-founder and Chief Design Officer Terry Lin in an interview.
“Where it seems like a stretch to go from outdoor furniture to materials science, it makes a lot of sense if you think about it,” he added. “Mother Nature, in all its glory, can be everything from raining to snowing, zero degrees to 120 degrees.”
Part of the new funding will go to research and development for new and better materials for Outer’s furniture, according to Lin. He declined to specify what these materials could be but noted that the company was exploring a variety of nontraditional applications such as materials that could help protect against biting outdoor insects.
But the most eye-catching aspect of Outer for venture capitalists is its sales and marketing model. The company effectively crowdsources these functions, relying on a network of Outer furniture owners on a platform it calls its “Neighborhood Showroom.”
People interested in how Outer’s furniture would fare in their particular environment can search the site and arrange viewings with showroom hosts. These hosts are current Outer furniture owners who are paid $50 per visit, regardless of whether a sale follows.
“One thing that’s unique about the model is that we haven’t been burning capital to expand it,” said Outer co-founder and Chief Executive Jiake Liu. “All of these hosts are real customers who have paid close to the full price for the product.”
Liu said Outer has close to 500 neighborhood showrooms across 49 states. The company’s goal, Liu said, was to grow this network to include representatives from as wide of a range of outdoor environments, styles and use cases as possible — and to reach more than 1,000 showrooms by the end of this year.
Outer’s products are currently limited to rugs, sofas and furniture covers. In addition to materials development, the company is looking to use the Series A funding to expand into new categories, including tables, chairs and umbrellas. But Liu and Lin said they would forgo categories where they didn’t feel Outer could make significant incremental improvements.