Canadian luggage brand Monos raises nearly $40-million as it seeks to grow

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For purveyors of luggage and travel accessories, it might seem patently obvious that a global health emergency paralyzing the travel industry is bad news. But even as Vancouver-based brand Monos saw more people in the first months of the pandemic returning its products than buying them, chief executive officer Victor Tam says there was an upside.

The Canadian company, which launched its first product line in June of 2019, faced stiff competition. Other brands such as Away, Roam and Béis also built up e-commerce businesses selling luggage and appealing to younger buyers with trendy colours and designs. But as many brands cut back on marketing to conserve cash in 2020, competitors were suddenly quieter than usual.

“We doubled down in marketing the luggage. We knew if we could grow the brand kind of in stealth mode in COVID, that there would be a once-in-a-lifetime event that we could take advantage of,” Mr. Tam said in an interview, referring to the resurgence in travel that has occurred as restrictions lifted.

Now, Monos is looking to accelerate its growth by opening stores and expanding into new markets beyond the U.S. and Canada. On Wednesday, the company is announced the completion of a US$30-million Series B investment round, led by equity fund Venn Growth Partners, and including investment by Canadian entrepreneur Michele Romanow. The funding is in addition to a $10-million round last December.

On top of its expansion and brick-and-mortar plans, a large part of the funding will be directed to building Monos’s inventory. That was an issue earlier this year when travel demand spiked – especially in the U.S. – and many products sold out. Monos could accept only pre-orders on some items, as supply-chain snarls delayed restocking. The company is forecasting 400-per-cent growth this year, and preparing for higher demand across the industry next summer.

“You need to get that stock six months in advance. There’s no way organically for this company, even with positive cash flow, to be able to finance that,” Mr. Tam said. “On top of that, we are not a company that’s been around for five-plus years, and have the credentials that banks need to give you that type of credit.”

Monos also plans to hire more staff, and to expand to Britain by the end of this year, and to Australia next spring. The company is also announcing that Marcello Bottoli, the former CEO of Samsonite, Louis Vuitton and Pandora, will join its board of directors.

“We know that there’s huge demand for this product,” said Venn Growth Partners co-founder and managing partner Chris Reynolds. He cited figures from research firm Statista estimating that the global luggage market at US$167-billion in 2019.

In its first six months in 2019, Monos had about $1-million in sales, and grew roughly eightfold in 2020, according to Mr. Tam. (Sales were helped by an ultraviolet sterilizing wand that Monos launched during the wipe-down-your-groceries phase of COVID-19, as well as customers buying luggage with aspirations of eventually travelling again.) Sales then grew by another 400 per cent in 2021. As airport delays and lost luggage dominated the news this past summer, the brand leaned heavily on marketing its carry-on suitcases and faux-leather duffel bags.

But comparatively, Monos is still small. Mr. Tam says its biggest competitor is New York-based Away, which had US$300-million in sales in 2019 before plunging to US$135-million in 2020, according to news reports. That brand is also expanding by opening its own stores.

Brick-and-mortar locations are helpful for marketing, Mr. Tam said, both in making a brand more visible and in connecting with shoppers who want to see products in person before buying. Monos plans to open 10 to 12 stores within the next two to three years, and is also in talks with other retailers to expand its wholesale partnerships in addition to its existing deal with Nordstrom.

A physical store presence also allows companies to provide more information about product features. For example, Monos designs its bags to make it possible for a customer to affix replacement parts – such as a roller wheel – on their own if they break.

“Luggage is being tossed around, and no matter what material you’re using, something is going to happen,” Mr. Tam said. “You don’t have to toss your luggage away. That’s the last thing we want, is these things to end up in the landfill.”