Shoes of Prey presses pause to select a business sale or pivot

Shoes of Prey, a Khosla Ventures-backed shoe retailer whose website let women customize footwear purchases by selecting the color and material of the sandals or pumps they wanted to order as well as the size, has announced it’s stopped taking orders after almost ten years trading.

The management team will now decide whether to sell or otherwise pivot the business.

Founder Jodie Fox announced the shut down in an Instagram post in which she writes about the struggles to scale the company’s early profitability.

“We tested many channels to scale what we had created. From award-winning physical stores, to wholesaling, and of course our direct to customer online experience,” she writes. “While all the indicators and data were positive, we were not able to truly crack mass-market adoption.”

“We are making the difficult decision today to pause orders and actively assess all our options to either sell, or at a later date, reboot the business with substantial changes,” she adds.

“We will cease normal trading as we go through this process. Our customers with outstanding orders will either receive their shoes as promised, or a full refund if we have been unable to make their shoes before this pause.”

A note on the company’s website also reads: “When we started Shoes of Prey back in 2009, we couldn’t have dreamed that we would have the opportunity to share in such an incredible adventure. And you were the most wonderful people to have that adventure with. Today we’re pausing to consider our options for the future of our business, and we have stopped taking orders. We have reviewed all of our orders and if we see that we are unable to make your shoes, you will be fully refunded.”

Customers with questions or queries are asked to email

Fox does not specify how many customers Shoes of Prey had been able to attract over its near decade run, starting in Australia and later moving its headquarters to LA — beyond referring to “millions of women around the world who have designed shoes with us”.

The company had shown signs of trouble this year, with the Sydney Morning Herald reporting it secured a small bridge round in March at terms which that were said to be “significantly lower” than its previous round of funding (it raised $15.5M in 2015).

In an email to investors at the time, CEO Michael Fox said the bridge round would be used to keep operations afloat and help it seek a new business model.

“Over the last 2 years we’ve made very good progress with our manufacturing capability however we’ve struggled to grow at the rates we’d forecast,” he wrote. “The terms are significantly lower than our last round of funding, but with no alternatives other than winding up the company our board today resolved to recommend this offer to shareholders.”

Last month it also emerged that Shoes of Prey investor Blue Sky had cut the value of its investment in the startup by 12%.

According to Crunchbase the custom footwear retailer had raised a total of $25.9M since 2009.

Shoe startups aren’t dragging their feet

Good thing Carrie Bradshaw, the shoe-loving heroine of Sex and the City, wasn’t a footwear venture capitalist. The high-heeled, high-priced and hard-to-walk-in pairs beloved by the TV icon are pretty much the least fundable concept in the shoe startup space lately.

Instead, when they do dip their toe in the footwear space, venture investors have been putting a premium on comfort.

At least that’s what recent funding records indicate. Over the past year-and-a-half, investors have tied up roughly $170 million in an assortment of shoe-related startups, according to an analysis of Crunchbase data. The vast majority is going to sellers and designers of footwear that people might actually want to walk in.

Top funding recipients are a varied bunch, including everything from used sneaker marketplaces to high-end designers to toddler play shoes. Startups are also experimenting with little-used materials, turning used plastic bottles, merino wool and other substances into chic wearables.

Below, we look at how startups are leveraging market trends to get a foot in the door.

Growth market

It should be noted that recent footwear funding activity comes on the heels of some positive developments for the shoe industry.

First, this is a huge and growing industry. One recent report pegged the global footwear market at $246 billion in 2017, with annual growth rates of around 4.5 percent.

Second, public markets are strong. Shares of the world’s most valuable footwear company — Nike — have climbed more than 50 percent over the past nine months to reach a market cap of nearly $130 billion. Stocks of several smaller rivals, including Adidas, have also performed well.

Third, men are spending more on footwear. Though they’ve long been stereotyped as the gender with more restrained shoe-buying habits, men are putting more money into footwear and could be on track to close the spending gap.

Sneakering in

Both men and women are spending more on sneakers, and venture capitalists have taken notice. Sneakers and sneaker-related businesses account for the majority of footwear startup funding, as consumers increasingly opt for more casual, sportier styles.

Much of the innovation is in the sale and design of pricey, high-performance shoes. The largest footwear-focused round in recent months, for instance, went to GOAT, operator of an online sneaker marketplace that specializes in rare and high-end shoes. The three-year-old, Los Angeles-based company secured a $60 million Series C in February.

Other sneaker companies to raise funding recently include StockX, an auction-style GOAT competitor; Stadium Goods, a streetwear retailer; and Super Heroic, which makes high-performance athletic shoes for children.

The spike in sneaker funding comes amid a growth streak for the sector. As mentioned previously, much of that is driven by men. However, one other bullish sneaker trend footwear analysts point to is the changing buying habits of women. Driven perhaps by a desire to walk more than a few blocks without being in pain, we’re buying fewer high heels and more sneakers.

Stylish and eco-friendly

Demand for more comfortable footwear doesn’t only translate into more sneaker sales. Venture investors also see potential in other comfy shoe startups, particularly those with eco-friendly options.

In this camp is Allbirds, a maker of merino wool shoes in casual styles that has raised more than $27 million to date. Meanwhile, Rothy’s, which makes shoes out of recycled plastic bottles and sells them for around $125 a pair, has brought in $7 million.

Slippers are also a fundable space, as evidenced by the $2 million seed round last fall for Birdies, a maker of footwear for people who want to pad around the house in slippers while also looking stylish.

And as previously noted, it doesn’t look like high heel-focused startups have been kicking up a lot of capital lately. However, designers that offer varied heel heights are still scoring some big rounds. This category includes Tamara Mellon, a two-year-old brand that has raised more than $40 million to scale up a shoe design portfolio that runs the gamut from flats to spike heels.

But does it make money?

Recent history shows you can make a good exit with a shoe startup. And you can also flop or stagnate.

One of the more noticeable recent flops was Vancouver-based, an online shoe retailer that shuttered last year and filed for bankruptcy following disappointing sales.

Others found they weren’t as good a fit for today’s consumers as hoped. Most recently, Shoes of Prey, a made-to-order women’s shoe startup that raised more than $25 million, secured a small bridge round to keep operations afloat. A few years earlier, ShoeDazzle, a celebrity-backed shoe subscription service with more than $60 million in funding, sold at a steep markdown.

Meanwhile, developers of 3D printing and scanning technology are stepping up the pace of M&A. In April, Nike snapped up Invertex, a seed-funded startup that specialized in 3D foot-scanning. Last year, Aetrex Worldwide, a leading maker of therapeutic footwear, bought  Sols, a venture-backed maker of 3D-printed custom orthotics and insoles.

Granted, it’s hard to imagine an episode about Carrie Bradshaw shelling out for custom orthotics. But in the exit-driven world of startup financing, it seems clear that Manolo Blahniks are out, while sneakers and insoles are in.

Sneaker market GOAT hires COO Lizzie Francis and makes a play for women sneaker shoppers

GOAT, the secondary marketplace for sneakers that recently merged with Flight Club, is announcing a new hire. Lizzie Francis will join the company as Chief Operating Officer, coming from Brilliant Ventures where she will remain a managing partner.

Francis formerly acted as CMO at Gilt Group and CMO at She’s been running Brilliant for a couple of years after founding it with Kara Weber. She also serves on the board of Shoes of Prey, a custom shoe company currently aimed at the women’s market. Now she’s taking an ops position at one of the biggest players in the sneaker market.

Along with StockX, GOAT has brought a huge amount of access and pricing transparency to resale sneakers, a billion-plus market. GOAT currently has over 8 million members, 400 employees, 100,000 combined sellers and 400,000 sneaker listings. After merging with the powerhouse retailer, it now has the two Flight Club retail stores in Los Angeles and New York.

GOAT CEO Eddy Lu says Francis had the cross-section of experience they needed in the days ahead.

“As we see the future of GOAT…we’re going international, we want to focus on more on women, we want to do a bunch of stuff, including innovation on the technology side, we wanted to bring in a great senior leader that has seen a lot of this stuff especially as we’ve done the Flight Club merger. We’re looking into more retail as well so we wanted someone that had great e-commerce experience but also understood retail that could really help us think through how to create model stores how to expand physical retail, and omni channel retail, in general. So, yeah, we talked to a bunch of people and Lizzie was the one who just kind of all of us just really gravitated towards.”

As a sneaker marketplace, GOAT already has an incredible opportunity to flip the script on the traditional attitude of that culture towards women shoppers. Sneakerheads who also happen to be women have been massively underserved to this point. GOAT’s female user base is growing at twice the rate of its male users. 

“There are so many things that are going so well here [at GOAT],” Francis says, “but in terms of immediate opportunity, obviously expanding into women is important for the company, and we’re seeing some really favorable tailwinds and data points that indicate that it’s a great time for us to be doing that. And also, our current customer bases, primarily male said, I’m sure you know, 85% of consumer spending is controlled by women. So it feels like now that we have a great platform in place it’s actually a great time for us to focus on that female customer that’s both a buyer and a seller.”

This year, GOAT will introduce sizing conversion tools for women on the platform, allowing them to easily figure out what men’s size will fit them. This is important because a huge amount of sneaker styles that are made for men are not produced for women, so both parties are shopping the same styles and pools of stock. They’ll also introduce more women’s styles to the mix.

GOAT and Flight Club as a combined entity has some interesting roads ahead of it figuring out the role of traditional retail in supporting and augmenting online sales. Lu says that both pop-up and traditional retail are in the plans.

“We’re open to whatever the customer tells us they want to need. Right now, the Flight Club stores have some of the highest sales per square foot comps in the country. People come to Flight Club because they’re cultural institutions and so we definitely see a need and an opportunity to create more kind of brick and mortar, long term lease store and keep market.”

Francis says that the biggest opportunity that she sees with the brand currently is to lean into storytelling. Between the launch of a shoe directly with Versace and Greatest, GOAT’s new periodical, there’s a chance to enhance the story side of the company – and storytelling does sell shoes, just ask Jordan Brand.

“I see that there’s still so much more opportunity for us to amplify storytelling across the platforms and in store in a way that really connects the consumer with the product,” says Francis. “Because whenever we buy product, when we buy style, it’s a reflection of who we are, and it says a little bit about us before the [other] person even knows who we are. I mean, I bet a fun trick would be what we are all wearing today, what shoes do we have on now? What’s our Monday morning shoe? what’s our Monday night shoe? They are telling the world ‘this is who I am.’ And so I think the thing I can help on right away is how we continue to amplify the storytelling that we’re doing and do it in a way where the consumer feels that we don’t leave any of the great frictionless experience of the technology that’s already there —but just make it addictive in a way that’s fun and exciting for both the consumer and the seller.”