Chums Secures $3.5 Million in Pre-Seed Funding

As Y Combinator Demo Day approaches, companies within the current cohort are actively seeking to generate attention prior to presenting their progress to potential investors. Among these startups are Runway, Mono, Pangea, and Flux.

Introducing Chums: A Social Shopping Platform

Chums, a novel social shopping service designed to facilitate product recommendations between friends, has successfully completed two pre-seed funding rounds, totaling $3.5 million. The platform aims to enhance the shopping experience through peer-to-peer suggestions.

Details of the Funding Round

Noah Elion, a founder of Chums, revealed that the company initially secured $1 million in December. Subsequently, they aimed to raise an additional $1.5 million. Due to significant investor interest, Chums ultimately raised $1 million over their target, culminating in a total of $3.5 million.

The specific valuation cap associated with the funds, obtained through a SAFE agreement, was not disclosed by the company.

Investor Participation

The $1.5 million funding round included contributions from Ludlow, Shrug, Contrary Capital, and Fuel Capital, alongside various other firms and individual investors. Update: BoxGroup provided the second-largest investment in this round.

Leveraging Team Expertise

Despite a recent product launch just weeks prior, Chums managed to secure funding reminiscent of a traditional Series A round. This success is partly attributed to the experience of the founding team. Co-founder Dick Fickling previously held an engineering role at Honey, a well-known shopping startup that experienced a substantial exit.

How Chums Operates

The Chums service is accessible via a mobile application. Users can follow specific product categories they are interested in and share relevant items with their friends. The app was released to the market three weeks before the fundraising efforts began.

When questioned about initial user engagement, Elion indicated it was premature to provide detailed data, but noted that early levels of engagement have been “encouraging.”

Team Composition and Future Hiring Plans

Currently, the Chums team consists of four individuals, described on their website as a close-knit group of friends. This description is largely accurate. Elion and Fickling initially connected while Elion developed a precursor to Chums, known as Chums Referral. The remaining team members, Lauren Williams (director of engineering) and Lena Gasilina (product), were pre-existing colleagues and friends of Fickling.

The company is actively seeking a designer and a front-end developer, after which they plan to pause hiring. Their intention is to achieve product-market fit with a team of six before pursuing further expansion.

Revenue Model

Chums generates revenue through commissions earned on recommended products, sharing the proceeds with users. While Elion did not disclose the specific retail partnerships currently in place, he stated that the company intends to establish direct relationships with retailers to secure more favorable terms.

Chums' Vision for the Future of Shopping

With funding secured, a nearly complete team, and a live application, Chums now focuses on validating Elion’s belief that existing online shopping platforms like Google are susceptible to manipulation, while Amazon excels when users have a clear idea of what they want. He suggests that the appeal of traditional malls stemmed from their “diversity of content” and the opportunity for “spontaneous shopping.” Chums aims to replicate this experience digitally.

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