In a move that unites two buzzy, millennial-focused, digital-first home startups, e-design platform Havenly has acquired direct-to-consumer furniture brand The Inside. The terms of the deal were not disclosed.

“We’re already a go-to destination for those looking for design, inspiration and home product recommendations,” said Havenly co-founder and CEO Lee Mayer in a release announcing the news. “Now we can also service custom made products to suit our customers’ wants and needs for a more hands-on design experience.”

The Inside will continue to operate its core business, and Mayer says that most of the startup’s small team will join Havenly, including co-founder Danielle Walish. The Inside CEO Britt Bunn will leave the company after aiding the transition.

Why this move, and why now? In a way, it’s strange that something like this hasn’t happened already. E-design platforms tend to charge consumers a modest fee for their interior design packages (Havenly’s cheapest offering is $79) and command fairly slim margins on the service. Their greater opportunity for profit is earning a cut on the furniture and decor sold with the design. If you make that furniture and decor yourself, the cut is obviously a lot bigger.

Starting a house brand has long been on Havenly’s roadmap—when the company netted $32 million in a Series C round in late 2019, one of the stated reasons for the raise was to develop a private label. Those plans were put on hold by COVID, says Mayer, as the business refocused on simply meeting the groundswell of demand that arose from the home boom.

When things calmed down a bit in 2021, Havenly once again started knocking on doors, only to find that furniture manufacturers were overwhelmed with their own backlogs. “We ran into a lot of supplier constraints around newer accounts,” Mayer tells Business of Home. “We got a lot of ‘Let’s come back to this next year.’ For a company like us, that likes to move pretty quickly, that was disappointing and hard. So an acquisition made sense in a lot of ways.”

The Inside, originally founded in 2017 by design industry entrepreneur Christiane Lemieux (who has since left), brought a direct-to-consumer approach to custom furniture. The brand has no showrooms, no factories and holds no inventory. Instead, customers design upholstery from basic templates online, pulling from a selection of more than 100 fabric patterns—including some from heritage companies like Scalamandre and CW Stockwell. Relying on digital printing and a network of on-demand manufacturers, The Inside then fulfills the order.

Buying The Inside is essentially a way for Havenly to cut through the manufacturer backlog and start making its own product quickly. It also delivers the platform a team that knows how to design and manufacture furniture as Havenly looks to grow its in-house offering into other categories—drapery, for example. “Our team is not made up of product development or product-sourcing people,” says Mayer. “So acquiring parts of their team that we could then use to potentially build out more product and start to think about things like our own supply chain or our own sourcing and supplying relationships was really critical for us as well.”

The two companies have other synergies. Mayer says The Inside’s most frequent customer request is for design help, so it’s possible that Havenly will pick up some new customers of its own in the deal. Havenly’s data, culled from thousands and thousands of design projects, could also prove helpful as market research for The Inside.

Moreover, the two brands seem to share some intangible qualities that make them likely partners. Both target a design-oriented, budget-conscious consumer. Both balance a tech-forward approach with an affection for the occasionally old-school trappings of the design business (it’s hard to imagine Modsy, which feels more purely a product of Silicon Valley, making a similar buy). Mayer and Bunn were friendly prior to the acquisition. Basically: The vibe checks out.

“This really accelerates our offering,” says Mayer. “It brings a brand that we think shares an ethos with us into our fold.”

Homepage photo: Courtesy of The Inside