It is starting to look like changing course with a start-up idea mid-flight in the tech sector is not a bad option at all. This is certainly the case with Fab.com; the website was that was originally conceived as a social network for gay men.

Ever since Fab.com decided to switch focus and dedicate the business to selling discounted furniture, art and novel items on a 72 hour deal format, the site has grown in terms of membership, sales conversions and ultimately profits. Only a few months ago, Fab.com was growing so fast that many likened it to Facebook and wondered if we could be watching the first real breakthrough in tech over the last 5 years.

Fab’s success has also made it a magnet for investors and just recently it received a new round of funding totalling $40 million. The funding round was led by a few Angel investors and leading VC firm Andreessen Horowitz. That Fab.com was able to receive even more money to fund its operations was hardly surprising; what was surprising however, was the $200 million valuation that was slapped on the deal.

This staggering valuation has left many analysts wondering if the $200 million is based on some sort of inflated expectation of what Fab will eventually become, or a genuine expectation of future growth. Whatever the case, investors by nature follow their hunches, and so far, it looks like Fab.com is a hunch they are willing to go with for as long as possible.

(Source: sitetrail.com)

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