Led by co-founders Pietro Bezza and Bill Earner, Connect Ventures will be focused on early stage companies in the consumer web, digital media, e-commerce, entertainment and gaming sectors. The first recipient of money from the fund is the London-based private sales site SecretSales, which is getting a £300,000 ($487,000) investment on top of the £6.3 million ($10.2 million) round that it got in February from a consortium of investors that included Doughty Hanson, Pantech Ventures and others.

And another two investments are close to completing: for an e-commerce company in Berlin and another London startup, focused around mobile apps. “One has revenue worked into its business model already, while the other is a bigger play that won’t have revenue for a while,” Earner says.

Some believe that the venture capital world may be getting a little overcrowded and overheated, with firms doing battle to get in on funding rounds for the choicest startups. So why launch a new fund now? For one thing, says Earner, the situation is less hot in Europe, and he says there a “gap” in the market for funding in the seed and Series A stages in tech here to help them grow faster.

“Not every startup has the privilege of going quickly from a few hundred thousand users to 20-30 million,” he says. “There are still opportunities to invest in really great companies that are not so hot that larger funds will get them automatically. We feel that those [smaller companies] could be attractive investments for us.” The goal is for this first fund to grow to €43 million from its current size of €16 million for such investments.

Secret Sales, he says, is a good template for how Connect Ventures wants to approach investments in the future: CV gives financial help, but also expertise — Earner is ex-Amadeus Capital Partners and has also worked at a number of startups in engineering, product management and marketing roles. Bezza has built and sold two digital media companies of his own, Neo Network and Magnolia, now part of the Zodiak Media Group of content companies, and has been an active angel investor in companies that include Picklive, PlusPlugg and Dri Dri.

“We invested in Secret Sales because we really liked the team and it has good investors backing it. We felt it would be good for us to be investing with quality investors like that,” Earner says. “Plus there are some specific skills that we are able to help out with, for example in areas like CRM and analytics. We see a valuable role for us there.”

The first targets within Europe, says Earner, will be startups in London and Berlin, where there is already “a lot of energy and startup activity.” Further along, he believes that there is a lot of undiscovered startup talent out there, and at least in one case his partner’s own background may help them in this respect: “There is a surprising number of good companies in Italy,” says Earner. Italy, he notes, has no hub in terms of a city where they have all converged, and that’s made discovering them more challenging.

— Mobile sports and fitness app Runtastic is moving beyond software, announcing a hardware line as well as its expansion to the United States.

— In the UK, private sales club SecretSales has raised £6.3 million in funding to double down on its expansion in the country.

— TCEU Editor Mike Butcher traveled to Latvia for the first TechCrunch Baltics meetup, learned more about the tech scene in the country as well as that in Lithuania and Estonia, and saw some interesting startups.

— Soup.me, which helps creative people aggregate and display their digital lives, has raised $530,000 in funding from Vienna, Austria-based SpeedInvest. I’m still kind of confused about what the (invite-only) service is supposed to do.

— Founded in Juy 2011, on-demand car ordering service provider Cabify – which I likened to the ‘Uber of Europe’ – is starting to gain momentum in its hometown (Madrid, Spain), but plans to expand to 15 more European cities in 2012.

Exclusive - Private shopping club SecretSales has raised £6.3 million in funding from a consortium of investors, including Doughty Hanson, Pentech Ventures and the Partech-managed OCP Innovation fund, TechCrunch has learned.

Launched in the United Kingdom in 2007, SecretSales plans to use the funding to double down on its expansion in the country.

The company says it is already the channel partner of choice for over 650 individual brands across fashion, accessories, home wares, travel and other lifestyle categories, and that it has attracted 2 million registered members to date.

Based out of Nothing Hill, London, with a staff of 50, SecretSales has also appointed a new board member. Sergio Dias, formerly CEO of brands4friends.de (acquired by eBay), has been appointed Executive Chairman and will join CEO Nish Kukadia and buying director Sach Kukadia on the board.

Notably, SecretSales cofounders Michael Cody and Silvia Cody announced that they will be stepping down from their active roles within the company, yet remain shareholders.

While looking through the May issue of Vogue UK and España (I have my Vogue dealers, because yes, it’s a drug) I gathered one thing. It doesn’t matter what’s on trend, what’s important is the quality of the garments.

Now, I am not going to serenade how much I love designer brands, because, let’s face it, we all have a bit of vanity in us. What I think should be appreciated though is the labour before the fruit.

Cashmere, silk, satin – yes, but lest we forget a good stitch, a well thought-through cut and meticulous  tailoring.

Azzedine Alaïa, for example. It takes patience and precision to create his masterpieces.

It’s true, most of the time desirable brands mean good quality. So let’s get our organizers and smarties out and scribble down this week’s shopping agenda with an eye for quality:

Audrey as Holly in sleep mask

While I only wish I could look at least half Audrey-esque while laying there sleeping, I have no choice – work awaits.

However, a longsome commute and 3 espressos later I looked at the designer sales agenda for this week and it woke me up the same way a good slap would.

The £2 sale at the Outnet is coming back with a blast! But this time, only 2,000 lucky ones will be able to enter it, and even of those not all will go away with an absolutely illegally priced bargain.

So once again, let’s get our organisers ready for these:

Weekly shopping agenda

For those who want to enter the £2 Outnet sale – do refer to tweet-a-reporter.

Cavalli Sale

It’s every girl’s dream to flick through a wardrobe full of clothes by Prada, Gucci, Dolce&Gabbana or any other luxurious brand that a mere mortal cannot afford. Unless you’re in on one of fashion’s best kept secrets that is taking the UK by storm.

There is a growing number of places you can go to get as much as 80 per cent off your favourite luxurious labels. vente-privee.com, brandalley.co.uk, cocosa.com, secretsales.com, hautelook.com are just a few hot spots for private designer sales where all you need to do is register, click on a link and start shopping.

“I’ve never thought I could buy a Cacharel skirt for £20”, said Kingston University film studies student and online bargain hunter Veslava Bzimovska.

“All I did was sign up to a few websites and now I always know if there is a big label on sale, as I can access it from my email.”

But brand lovers have to shop quick – these designer clearances start at around 6AM and last only a few hours or days, and as soon as one sale is finished, it goes off the web.

Rob Feldmann, chief executive of Brandalley UK, a privately owned website, revealed how this particular business model worked:

“We have a team of buyers who search out the best selection of products at the best price. For instance if a brand has 100 pieces available from past collections or cancelled orders, the buyers will choose 50 they think are the most appropriate for our members given the weather and the season.”

These specialist websites are different from your ordinary online retailers as they do not store the merchandise in warehouses. Instead, the web-based designer outlets simply reserve goods from the brands. Once a sale is over, the website buys the precise number of products purchased by customers which then go to the logistics centre. From there, the company checks the goods before sending them out to their clients.

The current economic climate and the fashionistas’ lust for designer goods have brought the companies some serious cash. In 2009 Brandalley’s total revenue was £10m in the UK and Mr Feldmann thought that 2010 would see a number three times that size.

“We get about 1.2m unique visitors per month, it’s quite a big website,” he said. “I think the recession has made the consumers very focused on price and on good value.”

Good value means designer products to the British, as according to Mr Feldmann, the website sold much more luxury labels than high street brands. The most successful Brandalley sales included Calvin Klein lingerie which sold 12,000 pieces, 5,500 products from Wonderbra, and 500 Hervé Léger dresses reduced significantly from around £650 to £200.

Another reason why these businesses have grown in popularity is because they are online. Bargain hunters can now indulge in shopping for luxury brands from home or at work. “Shopping at Brandalley compared to shopping at, say TK Maxx, gives you a massive time benefit. You can do everything online and get a prompt delivery. And because we are an online business, we are cheaper,” said Mr Feldmann.

As this business model is relatively new in the UK, it allows companies to expand quickly. Vente-Privee, another privately owned web-based designer outlet, was founded in France in 2001 and is often referred to as the online luxury label sale pioneer.

vente-privee Landing Page

The company launched its UK branch only two years ago and, according to the 2009 results, the UK website had a turnover of £2.7m. It forecasted a further increase by 167 per cent reaching a sum of £7.2m in 2010. The business is growing rapidly, as an average of 1,000 new fashion-savvy costumers sign up on a daily basis forming the current number of over 350,000 UK website members. Vente-Privee also has subsidiaries across Europe, mainly in France, Germany, Spain and Italy. All the branches’ turnovers added up to an impressive total of £610m in 2009 with a predicted growth by 25 per cent in 2010.

Jacques-Antoine Granjon, co-founder and CEO of vente-privee.com, said:

“We have every reason to be very optimistic. In 2009, Germany saw 100 per cent growth and turnover of £38m, and Spain 95 per cent growth and turnover of £40m. With respective turnovers of £8.6m and £2.7m, Italy and the UK also look promising.”

vente-privee.com, brandalley.co.uk and other companies with similar business models have also revised their advertising strategies. Although you might find a few advertisements of these online sales in print and on the web, the companies leave spreading the word to the customers, rewarding them with a little treat.

Members of Brandalley get discounts when they invite a friend to make a first purchase, during which both sides get £10 off. Cocosa offers the same deal with a competitive £15 off to their subscribers, while Vente-Privee gives away £8. When asked if this is a more beneficial form of advertising, Mr Feldmann said: “Yes, it promotes it. The best form of promotion, I think, is a recommendation from a friend.”

Friendly recommendations and generous discounts aside, these flash designer sales have sparked numerous discussions as to whether this innovative business model is going to change the way we shop online and to what extend does it actually save our money.

“Of course it’s a great way to grab a designer bargain. But I end up buying luxury clothes that I don’t really need,” said Ms Bzimovska.

“It’s like I bought that Cacharel skirt for £20. I did it only because it was there and it was Cacharel, when what I really needed was a pair of jeans. I wouldn’t say it saves your money, it just gives you an excuse to continue splashing out but with less guilt.”

With the somewhat cloudy economic climate in mind, it’s up to you to decide what is more important, shopping for clothes or shopping for brands.

Last week, for example, I was fortunate enough to grab a DKNY bag for under £15.

What’s that I hear? Lucky bitch? That maybe. But I do think that an eye for a great bargain is a skill that can be developed rather than a talent one is born with.

My mentor has always been my mother. At a relatively humble budget she would always know how to get the best licks in town, and this time I was referring to clothes.

So let’s get our organizers ready and scribble down the dates for these delicious sales.

Agenda March 28 April 3

Be warned – with these websites patience is virtue. It can take anything from five days to a few months to receive the valued designer grab, but it will be totally worth it, we’re talking quality and quantity here.

Additional brands which will go on sale this Wednesday, the 30th of March, that you might want to add to your calendar: Versace, Gianfranco Ferrè, Roberto Cavalli and Costume National at secretsales.com.

I love Christmas. I love the festive joie de vivre, the sparkly lights, the carols and I love, love, love Christmas pudding. However, almost above everything else, I love Christmas because it precedes the January Sales: the perfect cure for a mulled wine hangover.

If you haven’t shopped yourself out before the 25^th December, now is the time to be trawling the rails or cruising the Internet looking for a bargain. Before you set out though, I would recommend a battle plan. A bargain aint a bargain if you never wear it!

As always, there’s going to be lots of pieces from the 2010 collections that carry over into 2011, so if you spot some of these bad boys on the sale rails it’s a good idea to snap them up (and then feel smug when they come back in at full price!).

Lovely Lace… £23 (reduced from £46) http://www.asos.com

Lace: I’ve said it before and I’ll say it again. Love lace. It’s still a big hitter this year and it’s a great fabric that will work right through into the warmer months. Lace dresses worn with thick tights just now can be ‘Summerized’ come Spring, when (hopefully) it will be warm enough for us to get our pins out!

Maxi Skirts/Dresses: The key to wearing a maxi dress or skirt is finding the right one for your body shape. Maxi should mean maxi, floor skimming is best as it gives more length to your body; even being a few inches short can make them look frumpy not lovely and floaty. In 2011, the maxi goes sheer. So if you have one (or spot one in the sales) don’t be afraid to take a pair of scissors to the lining. I bought

Topshop Floaty Wide Leg Trousers were £45 now £15 http://www.topshop.co.uk

these maxi wide legged trousers from Topshop for £15 and I’m going to do just that when the weather heats up. Topshop already have some in their new collection, which are almost identical but completely sheer.

Biker: Leather has been kicking it back for the last few seasons but has remained somewhat in the shadow of the military trend. But Spring 2011 see’s it rev it’s engine a little more, so keep hold of the boots, the jackets and, for the bold, the leather shorts. I spotted a real leather jacket in the sale for £60. Bargainous!

60’s Ladylike: The clothes that make Madmen, or men go mad, if you prefer. Curves are still big, with strong silhouettes being the key to this look. I haven’t seen much in my ‘saling’ (clearly, you’ve picked ‘em all up already!). By Spring, the fabrics will be lighter and the colours fresher, however, if you do spot something 50’s/60’s with a lovely red reduced tag on it, be sure to pick it up!

Bell-Bottoms: I don’t know about you, but I was a little unsure about skinny jeans to begin with (“but they show eeeeeverything!” I wailed). Now, I can’t live without them.

These puppies are a great cut and colour for only £37 (were £145) http://www.secretsales.com

However, a new year, a new decade for that matter, and the trends they are a changing. 70’s glamour is going to be a rising trend over 2011 so it’s perhaps inevitable that flares would make a return too. Wear them high, and wear them wide!

Kitten Heels: I’ve heard a rumour that the more delicate shoe is making a comeback this year (after clogs, I’m sure we’ll all breathe a sigh of relief!). Personally, I’m not totally sure about this trend; a high heel can do wonders for the posture and the self-esteem. My feet, however, are delighted.

Jeminee Resort Wear has had its turn, next week its time for the jewellery…

The jewellery will be discounted for only a limited time, remember to check their website – www.secretsales.com to get the exclusive members only discount before it all goes!

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Moonstruck Sheer Kaftan in Ivory – was £144, now £30!

Sheer Cleopatra Kaftan in Black – was £216, now £30!

Sheer Sequined Beach Top in Black – was £216, now £36!

Couture Chiffon Kaftan in Baby Pink – was £126, now £44!

Complete the outfit ideas with these kaftans coming soon!

Last week, flash sales site Secretsales.com (one of the many vente-privee clones to have sprung up in recent years) had been advertising an upcoming 50% discount Apple iPad sale.

The usual business model here relies on getting unsold wholesale stock from retailers and brands at knock-down prices and selling it on to members of your “private club” benefiting the original brand by clearing inventory without damaging the brand’s reputation. In the case of the sought after iPad, getting severely discounted stock wouldn’t have been possible and so it’s almost certain that this was an intentional loss-making promotion.

On top of the sale itself, there was a strong viral element, with people encouraged to inform friends about the deal, with a prize (an iPad!) on offer for those who did refer sign-ups.

The sale was due to start on Friday at 16:00, and apparently having underestimated the level of demand, the Secret Sales site crashed at around 15:58 as eager bargain hunters started pounding their refresh buttons.

The twitterverse soon responded with tweets to @secretsales telling them the site was down, and comments started pouring in to their Facebook page.

Secret Sales managed to get up a static page apologizing for the site failing under heavy load, and by around 16:10 people were able to get into the site, only to be greeted by a message telling them that the iPads had sold out.

The wrath of the mob

Secret Sales updated their Facebook page suggesting that people come back on the weekend when more iPads would be released.

It didn’t take long for the sentiment of the crowd to turn from anticipation, to annoyance, to outright anger, with Secret Sales unable to keep up with censoring the page as more abusive comments were added. Within a few minutes a new facebook group called “secretsales.com are a big online scamming agent” had been created and started filling up.

At around 17:49, Secret Sales changed their decision about spreading the sale over several days and released all stock immediately, notifying users via Twitter and Facebook:

The additional iPads sold out quickly and visitors were able to get tantalisingly close to the “add to bag” button only to be met by a slightly quirky message telling them that there was no stock.

Unsurprisingly a further barrage of abuse ensued on the retailer’s Facebook page, with some customers enraged that Secret Sales had backtracked on the plan to spread sales out over the weekend. Several named competitor Brand Alley as a better option with others suggesting further investigation should take place to determine whether any advertising or trading standards guidelines had been breached by the promotion. At least one person did post claiming to have successfully ordered an iPad.

Post Mortem

Were Secret Sales just naive about how people would react to the sale, or was this a carefully thought out marketing decision? Undoubtedly many thousands of users signed up solely because of the promised iPad sale. Moreover these were good quality leads since they signed up to actually fork out a non-trivial amount of cash (£264).

Despite the complaints on Twitter and FB, how many of these people were paying customers that will now quit using Secret Sales and discourage other customers from using it? As of today, the protest group has only 79 members. It seems likely this will end up being a significant net gain for Secret Sales in terms of registered users, and ultimately paying customers.

In terms of the overall cost of the promotion, let’s assume Secret Sales make a loss of around £250 per iPad, and they have 10 a day for 3 days. That puts the cost at around £8,000 if you count the one free one. If the promotion resulted in a net gain of around 5,000 registrations (possibly a lot higher) then this would give a cost of acquisition of £1.60. Even at £2 a registration, that might still be a good outcome for Secret Sales given that their average customer lifetime value will probably be on the order of £100s. One slight issue is that this product is quite different from their usual fare of clothing and accessories, so it’s possible that a significant portion of the new signups may be quite low value, at least until Secret Sales start selling more consumer electronics. The number of registered users might also be useful in bolstering the perceived value of the business to any potential suitors.

Lessons learned

How could Secret Sales have done this better? Much of the anger arose from people questioning if there were actually any iPads available at all. If Secret Sales had been open about the fact that they only had 10 per day (or whatever the number was), then much of this could have been avoided by making the lottery-like chance of nabbing one completely clear. On the technical front, this isn’t the first time the site has gone down under demand, so they’re no strangers to scaling issues, and indeed had mentioned upgrading their infrastructure to cope.

Managing Social Media

Secret Sales’ main channels of communication were their Facebook page and Twitter. Although the promotion had been advertised via email as part of their normal offers mailing, no further emails were sent as the iPad incident unfolded.

The Twitter account, with around 2,000 followers, was active in the lead up to the sale, building up hype with messages like:

The remaining 3 tweets then mirrored those on the FB page, apologizing for the downtime, promising more stock on the weekend and finally changing their mind to release all stock. They made it clear that the weekend stock would not be sufficient to meet demand.

The Facebook page, which appears to be the primary communication channel, has close to 6,000 followers, but obviously lacks the immediacy of twitter. In the build up to the sale, Secret Sales had been actively responding to user queries raised on the page. As things started to go wrong and messages flooded in, they stopped replying altogether. Here it would have been an option to temporarily restrict users from posting to dampen down the emerging criticism and reduce the burden of moderating some of the more abusive messages. Although it’s possible that people would have then taken their complaints elsewhere (Twitter, or other uncontrolled forums), it’s more likely that the majority would have just written off the issue and found better things to do with their Friday afternoon.

On Monday morning, Secret Sales released an apology on Twitter and Facebook, which appears to have received mixed reactions.

If you’re feeling a sense of deja vu here, then it may be because Groupon clone Groupola tried to run a similar promotion with iPhones a few months back and ran in to the same kind of difficulties

It will be a while before Secret Sales can determine whether the damage to their brand is merely a short term blip or something more significant, but hopefully their story will prove to be instructional to themselves and other startups.