Mall Operators Begin Cultivating Startups
WSJ: America’s startup-investing frenzy has reached the shopping mall. On the prowl for retail innovation, Simon Property Group, the nation’s largest mall developer, has funneled roughly $20 million into 18 startups, mostly over the past 15 months through its venture-capital arm, Simon Venture Group. In June, Simon invested $1 million in Union Station, an online bridesmaid’s dress rental service. In an early meeting, the two companies brainstormed ways that Union Station—which currently operates a showroom at its New York City headquarters and runs pop-up events around the country—might eventually develop a presence in Simon malls. J. Skyler Fernandes, managing director of Simon Venture Group, has also introduced the startup to roughly a half-dozen possible investors.
“It’s a potential new retail category that Simon doesn’t have in its portfolio of retailers,” said Mr. Fernandes, who was brought in to launch Simon Venture Group last year, having previously worked for Centripetal Capital Partners, a Stamford, Conn., venture firm.
Corie Hardee, 35 years old, said she founded New York-based Union Station in 2012 after realizing that the four most expensive dresses in her closet were bridesmaid’s dresses she had worn just once. The investment from Simon Venture Group “is a great validation of what we are doing,” she said.
Westfield Corp. , another mall developer, runs Westfield Labs, which employs a team of software engineers and invests in—and works with—startups. Indeed, Simon and Westfield are two of five mall operators that are backing the Silicon Valley startup Deliv Inc., a crowdsourced delivery service that connects available, vetted contracted drivers with retailers that need items delivered. The as-needed drivers make it easier for retailers to compete with Amazon.com Inc. and other big e-commerce companies.
Daphne Carmeli, the 51-year-old founder of Deliv, said working with the top mall developers reduces her Menlo Park, Calif., company’s operating costs, provides access to hundreds of retailers and makes it easier to offer a single solution to major retailers with locations around the country.
Speaking about Deliv, Mikael Thygesen, Simon Property’s chief marketing officer and part of the team that vets potential investments, said he believes that using an existing store as a distribution center makes the physical presence more valuable. “Fulfilling from the store is very interesting to us,” Mr. Thygesen said.
