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Duo make room for AI to crack £700bn homewares market

Fy! Founders Tom Beverley and Jonathan Thomson (FY!)
Fy! Founders Tom Beverley and Jonathan Thomson (FY!)

Home interiors marketplace Fy! sounds like somewhere tech buzzwords go to breed: it gobbles up social content and uses that, alongside machine learning and a vast vault of data, to give shoppers a personalised experience that lures them to spend more money.

An AI art gizmo on the site lets you make your own home prints, while its “rooms” feature sees users snap their room and upload it to Fy!’s generative AI tool to see their home transformed into, say, Barbiecore or boho — “like an interior designer in their pocket,” and then buy the products.

Some 250,000 rooms have been generated on the site since its launch three months ago. Fy!’s co-founder Tom Beverley has been running a “very data, and machine-learning-led business” since its launch in 2017.

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He says it is more “of a tech and marketing company than a retail business — there isn’t off-the-shelf technology that’s doing what we’re trying to do, our engineers built it all.

“Where sites like Amazon use purchase data to suggest you buy something again, our feed ‘learns’ what customers want — our approach is you are what you shop. If someone likes a particular grey Scandinavian product and adds it to their wishlist, then our site, app and emails will start sending you grey Scandi products.”

Beverley and co-founder Jonathan Thomson launched Fy! after building up CVs full of big digital brands, between them working at insurance broker Confused.com, accommodation site OneFineStay (where they met), vehicle rental firm Zipcar and marketplace Fab.com.

Beverley says: “We realised people across all countries want their homes to express who they are and their personalities but struggled with where to shop to find exciting products as well as how to put looks together.”

The duo initially set up Fy! as a jewellery platform. “The vision for the business was to build the best way to find cool, interesting products, it didn’t really matter what category. But it became clear that most people who wanted jewellery knew where they wanted it from, so we pivoted to home and art.”

There followed six months of trial and error on social media: “If something had a lot of likes after a post on social, we’d upgrade it to paid marketing on Facebook or Instagram. By Black Friday in November 2017, we’d cracked it — we thought we’d [bring in] £15,000 and had a bottle of champagne ready for when we hit £10,000 — but we opened it before midday, and did our first £50,000 day.”

Turnover grew 10 times between 2018 and 2019, and tripled in the next two years.

During the pandemic, Beverley says, people “got bored of their bare walls and old furniture: we saw really fast growth to about £25 million in 2020.”

Revenues have settled since, expected to be £18-£22 million this year: “it’s down from the Covid peak, but we’re now much more profitable.”

US sales now bring in about 60% of revenues. That growth will be watched by Fy!’s backers — since launching with a £150,000 SEIS round in 2015, it has received £12 million of investment from VCs and angels including Hoxton Ventures.

“We are aiming to be profitable by the end of this year,” Beverley says. “The generative AI side of the business has much higher margins than the core marketplace and it’s growing really fast.”

Fy! is selling in over 100 countries, with Instagram fans including Gigi Hadid, Paloma Faith, Amanda Holden, and Alex Scott.

“We’re lucky to have fairly long-term investors, who are not putting us under particular pressure to exit,” Beverley adds. “We’ve got our heads down until at least 2025, before an IPO — our preference — or maybe an acquisition. But homeware is a $700 billion market that’s never really been cracked online — and we plan to do that.”