Declan Ee always knew he wanted to start his own business.
But when he graduated from University College London in 2006, he saw his colleagues applying for jobs at investment banks and decided to give it a try.
His first appearance? Lehman Brothers.
“I enjoyed seeing how companies function on a global scale. That was very interesting.”
But the collapse of Lehman Brothers in 2008 not only rocked global markets, it also threw Ee into turmoil.
“I worked in the subprime mortgage division. I dodged the reporters by going to Lehman in Canary Wharf. That led me to eventually get my head out of banking.”
… it’s about building a good foundation and a strong company that provides value to your target customers.
Declan Ee
Co-Founder, Castlery
The 39-year-old Singaporean eventually left investment banking in 2016 to build his furniture start-up Castlery.
Today, the company grosses millions and its contemporary pieces can be found in more than 300,000 homes worldwide, Castlery said. CNBC Make It finds out how.
Furniture for urban millennials
It all started when Ee returned to Singapore eleven years ago and set up his marital home.
His good friend and co-founder Fred Ji was also looking for affordable modern furniture.
“We bonded over that… (the process was) frustrating. We want the beautiful pieces, but they are so inaccessible.”
This is due to things like price and managing multiple delivery times for furniture, he explained.
That’s when they came up with the idea of selling affordable designer furniture to “urban millennials” between the ages of 25 and 45.
“In this age group you go through a lot of changes. You leave school, you start building your career, you get married, you have a child… We add things to our homes,” Castlery’s president told CNBC Make It.
Ee wanted to provide options for young adults who want an “inspiring space” and “something more than Ikea” – without breaking their budget.
In 2013, Ee and Ji took the first digital step with Castlery, allowing consumers to tour a virtual studio and purchase furniture online, disrupting the traditional furniture industry.
“When customers started buying furniture online, they realized, ‘I don’t have to go to 25 furniture stores anymore.’ The next time they need to buy something, they will do it online again.”
Learning from “explosions”.
Ee’s experience in investment banking, where he “saw a lot of explosions,” taught him a lot about running his own business.
When it came to funding Castlery, Ee was determined not to take the “venture capital route” too early for his start-up.
“In the VC game, you want to replicate your valuation every 18 months. And when we started, I knew we had to spend time learning the business,” he said.
Since he had no experience in furniture retail, Ee estimated it took him six to seven years to find his feet, which is as long as VCs’ “fund life” period.
“Immediately there is a conflict… that’s why stress arises – you don’t have clear thoughts because you have to scale at all costs.”
Instead, Castlery’s first investments came from family members and other entrepreneurs who had exited their businesses.
“At its core, it’s about building a good foundation and a strong company that offers added value to your target customers. That will always have an impact whether you want to sell your company or take it public,” said Ee.
Growth accelerated by the pandemic
When the pandemic hit in 2020, Castlery had just begun expanding into the US market, in addition to its presence in Singapore and Australia.
“I thought, wow, this really isn’t supposed to happen. I was really stressed because our most profitable country was Singapore and there was also a circuit breaker there.” He was referring to partial lockdowns in 2020 that were intended to break the chains of infection.
But his stress turned to surprise when he saw a surge in e-commerce, with nationwide lockdowns pushing shoppers to rely on internet retailers for their consumer needs.
We grew so fast that our faces turned green.
Declan Ee
Co-Founder, Castlery
And as millions of employees were locked out of their offices and forced to work from home, the “meaning of home” also changed, according to Ee.
“It’s not just a place you come back to (after work). You do your job, you pursue your passions, you have your children. How you decorate your home is important because you spend a lot more time there.”
As more people wanted to upgrade their spaces, Castlery’s growth had “accelerated,” Ee said.
“We grew so fast our faces turned green.”
Castlery said the company grew “six-fold” during the pandemic, generated over $100 million in its most recent fiscal year ending March 2022 and was profitable in 2020.
However, Ee believes that Castlery’s biggest selling point, with or without the pandemic, is the design and functionality of its products.
“I speak to customers from the US every month and they say, ‘We love your washable sofa range!’ I thought, ‘Okay, is this a thing?'”
“I think as Asians we are pretty practical,” he said.
Ee added: “They would explain that you won’t have that option in the US at that price.” According to him, his furniture is “20 to 30 percent” cheaper than comparable pieces on the market.
Each collection is assigned a buyer, an engineer and a planner – this trio works well to ensure products reach the market in a timely and cost-effective manner.
This is achieved through a “rigorous process that has been refined over the years,” Ee said.
“Each collection has a buyer, an engineer and a planner assigned to it – this trio works well to ensure products reach the market in a timely and cost-effective manner.”
He added: “(The) buyer will find best-in-class manufacturers to work with. Engineers redesign inefficient processes while a planner works to source materials at the best possible price.”
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Clarification: This story has been updated to clarify the timeline for when Castlery thought it should seek venture capital funding. It has also been updated to clarify that the company was profitable in 2020.