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Rockets of Awesome Raises $19.5 Million to Fund Omnichannel Vision

Shopping for sprouting kids who outgrow their clothes on the regular is a problem Rachel Blumenthal set out to solve in 2015. Now, her vertical apparel startup Rockets of Awesome will use $19.5 million in Series C funding, announced Tuesday, from new investor and strategic partner Foot Locker to embark on its journey toward becoming a truly omnichannel retailer—which Blumenthal says was part of the plan from day one.

“We have to be at multiple touch points to really serve [the customer],” she said.

Since its start as a subscription business that ships quarterly boxes of curated kids’ fashion to members’ doorsteps or on a schedule of their choosing, Rockets has set a goal of diversifying its business model. After allowing members to shop a la carte on its e-commerce site for boys’ and girls’ fashion to supplement their seasonal boxes with fill-in pieces from capsules and limited-edition drops, Rockets is now giving non-members access to this part of its site in a bid to boost revenue and introduce a new audience to its brand.

Millennial moms and dads, already comfortable with the direct-to-consumer model, make up a good portion of Rockets subscribers. Parents fill out a quiz on the Rockets site about their child, which helps staff gauge their fit, style preferences and anything else needed to pick just the right eight styles for each delivery. The company bucks the trend among subscription-based companies of curating goods from other brands, instead designing leggings, skirts, dresses, tees, jackets and more in house and putting data to work informing aesthetic decisions and details.

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Despite parents and kids loving the service and styles, Blumenthal says the percentage of subscribers who kept every piece in their box was stubbornly low—down in the single digits, despite the discount offered for buying all of the garments. That required a “two birds, one stone” solution, she said.

“It’s really important to be customer-centric but it’s also important to be aware of how you’re going to build a successful and profitable business,” said Blumenthal, whose husband Neil co-founded Warby Parker. “We needed customers to keep more of the pieces in their box to make it a profitable channel for us.”

The problem was that customers often found items in their shipments that were redundant to clothing already in their wardrobes. That’s when Rockets introduced the “peak” feature, which gives subscribers a glimpse at the items going into their box before it ships. Parents gain more control over the process and kids feel empowered, too, Blumenthal explains. But the best part: the number of people keeping their full $150 boxes jump to 60 percent.

Every season Rockets of Awesome designs and produces about 150 items total for boys and girls. The data science team works closely with merchandisers to ensure the human touch counterbalances analytical insights when necessary. Bringing together the design team’s aesthetic prowess with numbers-driven insights not only enables supply chain efficiency, Blumenthal explained, but also “enables our customers to have an end-to-end better experience.”

Over the past several years, Rockets has pared down its fabrics to a core group of key materials that kids love for their softness and stretch but look polished enough to please parents. Playful details stand out, from glow-in-the-dark treatments to sequins, glitter, hidden pockets and more. Blumenthal says she’s starting to see an uptick in interest around gender fluid clothing and more gender non-conforming kids. Sometimes a boy just wants to wear a pink princess tutu, she says, and Rockets can offer that.

Parents appreciate the brand’s soft, easy fabrics for children who have sensory issues or might be on the spectrum, Blumenthal noted, and Rockets is a good option for kids who don’t function well in the cluttered confines of brick-and-mortar.

That’s not to say that Rockets is anti-store. To the contrary, the new investment—led by Foot Locker’s $12.5 million contribution with participation from existing investors Forerunner Ventures and General Catalyst—will help the brand experiment with building an offline channel to match its strength online. Blumenthal said it was important to see Foot Locker’s executive leadership team not just speaking about innovation but “leading with their efforts,” which includes cozying up to other digitally native brands like GOAT, Super Heroic and Carbon38 over the past year. She envisions a symbiotic relationship in which Foot Locker lends its operational expertise while learning from Rockets’ edge as a digital native.

For the kid’s wear company, 2019 will be all about discovering what Rockets in real life is like—and how the brand translates to a store setting. “We have a clear point of view of what the overused term ‘experience’ will be like for our customers,” Blumenthal said.