Dive Brief:
- DTC custom rug brand Ernesta has raised $20 million in Series B financing to aid in its growth plans, according to a news release.
- Ernesta secured the funding through venture capital firm Addition, along with existing investors True Ventures and Platform Capital Management.
- The funds will be used to expand the number of company showrooms in the U.S. and to enhance its technology platforms, specifically around manufacturing and fabrication.
Dive Insight:
Four-year-old Ernesta is doubling down on physical retail as it enters its next phase of growth.
Ernesta currently has six showroom locations, will open a seventh in Manhasset, New York, next month, and is planning to add eight more this year, including in Ardmore, Pennsylvania, and Charlotte, North Carolina. It expects to have 30 showrooms by the end of 2027.
"Ernesta is building a truly differentiated brand in a massive category that has lacked a modern consumer leader," Lee Fixel of Addition said in a statement. "The team has combined strong product curation, a compelling retail experience, and proprietary technology to simplify the custom rug market."
Ernesta founder and CEO John Foley added that rugs are an important design element in homes, but "the category has historically been fragmented, opaque, and difficult for customers to navigate. We are building Ernesta to change that.”
Ernesta is also expanding its executive team, naming Chief Marketing Officer Alan Smith to the new position of president. Additionally, Alexandria Norton has joined Ernesta as chief financial officer, succeeding Jesse Selnick, who held the post since 2023. Both Smith and Norton report directly to Foley.
Since launching in 2022 as a digitally native brand founded by former Peloton executives, Ernesta has found investors willing to support the company’s efforts to grab a share of the floor covering market. Six months after securing its first $25 million, the startup released its beta e-commerce platform and by April of 2024, Ernesta was ready to open its first brick-and-mortar store located on Manhattan’s Upper East Side in New York City.
Ernesta has stuck to a strategic plan of opening new showrooms to complement its online business. It opened a second showroom in Bethesda, Maryland, in an area populated by a number of DTC brands. Last year, Ernesta opened a third showroom in Greenwich, Connecticut, followed by Summit, New Jersey; Birmingham, Michigan; and Dallas.
