Why this investor put $1.5 million into a manufacturing and e-commerce start-up launched from eBay

Bathroom component manufacturer and e-commerce start-up Allure Bathrooms has received $1.5 million in growth capital from the Disruptive Investment Group, which will take 40% equity in the business.

Co-founders Tony Ngyuen and Vinh Luong first pitched to DVI shortly after launching an eBay store in 2010.

They were manufacturing their own stock after bringing the team they chose in China out for a tour around Australia to get to know the local taste and style of bathroom fixtures.

DVI and Aura Capital Group director Calvin Ng told StartupSmart they were impressed with the team and the market gap with bathrooms being a $4.6 billion industry. But they were concerned about the product connectivity and the warranty issues.

“We waited and kept an eye on them for three years. 2013 was the first real year of explosive growth for them with omni-channel capability,” Ng says.

Ng says the traction they were showing and the fact no warranty claims had been filed in three years made the investment very attractive to them.

“It ticked all the boxes we have for investments except the one where we like business that don’t hold inventory. But in many ways that’s a competitive barrier too,” Ng says.

As Allure Bathrooms has their own brand and designs, and control the whole distribution channel from manufacturing to sales to distribution. Ng says this mitigates a lot of the risks businesses with real-life products can struggle with.