Flashing Toward the Holiday

What a week for flash sales, and we’re not talking about the discounts.

First, San Francisco’s Lumia Capital and New York’s Invus Financial Advisors invested $5 million Tuesday in a first round of venture capital for MarkaVIP, a Middle Eastern flash-sales site. Then Fab.com scored a round of $40 million in funding, led by Andreessen Horowitz, which plunked down money Wednesday on a design-focused startup that is being called the fastest growing e-commerce site ever.

"We think there is a really big business in aggregating the world's designers," Jeffrey Jordan, a general partner at Andreessen Horowitz who will be joining Fab.com's board, told the Wall Street Journal.

Ditto, apparently, for aggregating the world’s best vino. The news hit today that flash-sales site Lot 18 is bringing its wine and gourmet food daily deal site to Europe’s $100 billion market via the acquisition of Paris-based Vinobes for an undisclosed sum. Site cofounder Philip James told Fast Company that with the acquisition of the French flash sales site for wine will aim to add members in the United Kingdom, Germany, and France.

Finally, eBay announced its first-ever flash-style deals for a holiday shopping season that’s been marked by the quest for cheapies. It will be releasing four new deals every hour on the hour from 7 a.m. through 1 p.m. Pacific Standard Time for a total of 24 items at up to 88 percent off suggested retail prices, and with free shipping.

Among the deals are the Sony Cyber-Shot DSC-W560 Digital Camera for $79.99, which it says is half off, and the Apple iPad 2 (16GB) for $459 which is 8 percent off.

Experts have observed that the daily deals sector, including flash sales, may still be growing, but it will have to make some changes to survive and achieve profitability. Last month, a Forrester Research report suggested that some sites are already doing so by adding new items to sell.

"Flash sale sites like Gilt Groupe are already essentially becoming marketing companies, leveraging their customer file to sell everything from full-price merchandise to ancillary categories ranging from food to travel,” Sucharita Mulpuru wrote in the report.

Given the investor interest in the category, it seems as if the bigger players, at least, will have the money to do it.

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Teresa Novellino writes for Portfolio.com