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The surging startup Fab is spending some of the $40 million in funding it just booked. Today Fab announced that it’s acquiring New York based startup Fashion Stake as it looks to expand its focus on its best selling category, clothing. FashionStake’s co-founders Vivian Weng and Daniel Gulati will join Fab, but beyond that terms of the deal were not disclosed.
“They are super well respected with the kind of independent designers we want to feature on Fab, so having their industry connections will be a great help,” said Fab CEO Jason Goldberg. The Fashion Stake site will fold and become part of Fab.com. But Mr. Goldberg said that they may look to incoporate elements of the company, like their crowdsourced model for voting on items to see which goes on sale.
While Fab declared that it was cash flow positive after just one month of sales, that is no longer the case. Since its big raise Fab has switched into growth mode and is not focused on profit. “We are looking at how to become a $100 million company, a $300 million company, how far we want to go on a roadmap to 2014,” said Mr. Goldberg.