For the fifth time in two years, Havenly has gone shopping. Once an e-design disruptor, now a fast-growing house of brands, the company has acquired DTC furniture startup Burrow. The deal comes hot on the heels of Havenly’s purchases of The Citizenry and St. Frank earlier this year. Terms were not disclosed.

“Burrow’s innovative approach to design, in-home furniture delivery and functionality helped reinvent the way people furnish their homes, making it a natural fit for the Havenly family," said Havenly CEO Lee Mayer in a statement accompanying the release. “Burrow fills a unique gap in the market and within our portfolio.”

Burrow was founded in 2016 by Wharton students Stephen Kuhl and Kabeer Chopra, who developed their dorm-room concept into a business through startup incubator Y Combinator. The pitch: Modular, easy-to-assemble sofas, quick-shipped direct to consumers at a reasonable price. Eight years later, the two have raised tens of millions in VC funding (including a $25 million round in 2021); opened four retail locations; and expanded into outdoor, lighting and rugs.

Mayer declined to disclose Burrow’s revenue but said the number had crossed into nine figures. The deal, she says, was not a distressed acquisition akin to Havenly’s 11th hour deal that snatched Interior Define from the jaws of collapse, but a more measured process.

Mayer’s connection to Burrow dates back to the early days of both companies: Her sister Emily Motayed, originally a Havenly co-founder, was a college friend of Kuhl’s, and the three entrepreneurs traded notes over the years. At some point, Mayer and Kuhl discussed a potential merger, but abandoned it amidst the chaotic Interior Define deal. This year, the two picked up the conversation.

“It’s a really well-run business, it’s pretty scaled as well. There’s not a lot out there in the market where we feel like we could add something to the mix and get accretive value [without the company being] a complete [disaster],” says Mayer. As to Burrow’s motivation to sell? “It’s just hard to be a standalone brand without a certain level of scale right now. … [Havenly] is able to lower marketing costs quite a bit by selling through our platform. Operating leverage [that comes from consolidating C-level teams] is huge. If you’re touching profitability, but not quite generating a ton of cash flow, you’re seeing all these headwinds … [Kuhl and Chopra] could see that consolidating would be better than remaining standalone.”

Kuhl and Chopra will remain on to aid in the transition. Mayer says that the majority of Burrow’s 70 or so employees will also stay on after the deal, and that Havenly will continue to operate Burrow’s existing retail locations.

The purchase of Burrow follows the same playbook that has underpinned Mayer’s acquisition strategy for the past two years: During a downturn in the market that favors buyers, snap up digitally native home brands with a design focus and a millennial-or-younger customer base. In that, Burrow fits the pattern. “I want to own seating for this generation,” says Mayer. “[The goal is] for every single millennial and Gen Z individual to buy a sofa through one of Havenly’s brands.”

Though the brand shares some superficial similarities to Interior Define, Mayer says, Burrow has some key differences too. Its average price point is lower, its selection is all quick-ship, and its demographic doesn’t line up identically with Interior Define’s—Burrow typically reaches a younger and less affluent audience, and the mix of customers leans more male. The two companies’ internal cultures are also distinct.

“[At Havenly] we have a lot around design trends and know aesthetically where things are going, and [they] do a lot more around function—what people’s needs are,” says Mayer. “It’s a really engineering-based product design culture.”

Another key factor: Size. Barring Interior Define, Burrow is the largest deal Mayer has struck since kicking off a string of acquisitions with the 2022 purchase of The Inside. The move considerably increases the overall size of Havenly—Mayer declined to provide exact figures but said that though the company is shy of a billion dollars in overall revenue, it is now drawing in “multiple hundreds of millions.”

The deal also formalizes what has long been clear: Havenly is an e-design company in origin story only. Fees for design services only make up a tiny share of its overall revenue. And while design projects do drive significant sales for Havenly and its brands (Mayer pegged the number at 25 to 30 percent), they will likely influence a smaller and smaller percentage of its business as the overall pie grows bigger. Immediately following the Burrow deal, Mayer renamed the company from “Havenly” to “Havenly Brands” to reflect the company’s evolution.

Though Mayer’s house of brands is growing, it’s not quite ready for sale—yet. Like Burrow, Havenly has raised tens of millions in venture capital money—not to mention the equity doled out during its various acquisition deals—and has its own investors to please. But Mayer says the market conditions for an IPO aren’t right, and the company isn’t ready to be sold to a strategic buyer or private equity firm. “At least over the next couple of years, our perspective is to get as scaled and as profitable and healthy as possible, and then, theoretically, the value will exist for someone.”

In the meantime, given the slow motion-recovery of the overall home industry, there may be more acquisition deals to come. “I actually thought we’d be done after Burrow,” says Mayer. “But there’s still a ton of deals out there, and a lot of pretty good assets that want to move on to their next adventure.”