One of Deliveroo’s earliest backers has made a new investment in Fy!, an online lifestyle products retailer, as it strengthens its executive ranks in preparation for a major expansion.

Sky News understands that Hoxton Ventures, whose inaugural fund in three British tech companies that went on to become ‘unicorns’, has led a £5m fundraising for the digital marketplace.

The funding round, which will be announced later this week, will be confirmed as Fy! bolsters its top team with the appointment of Benjamin Leaver as its new chief financial officer.

Mr Leaver, a former executive at Naama and Treatwell, is understood to be taking up the role this week.

Fy!’s growth strategy has been aided by a tenfold surge in revenue over the last year as the coronavirus pandemic has lit the touchpaper beneath most areas of online shopping.

The site, which was launched in 2017 by co-founders Tom Beverley and Jonathan Thompson, partners with more than 2,500 brands and artists, enabling them to sell home and living products to international customers.

It targets 25-to-40 year-olds who are typically underserved by traditional retailers and who are seeking alternative inspiration for art and homeware products.

Hoxton’s decision to lead the latest funding round – which may be followed by another capital-raise later in the year – will boost Fy!’s hopes of reaching ‘unicorn’ status in future.

The London-based investor has backed Babylon, the digital health platform, cybersecurity specialist Darktrace and Deliveroo, which confirmed its intention to float on the London Stock Exchange on Monday.

Fy!’s latest funding will facilitate its growth in overseas markets including the US, Australia and parts of Europe.

Mr Beverley said that Fy! had chosen to partner with Hoxton because of its “strong track record in supporting UK start-ups scale globally”

His co-founder, Mr Thomson, said the company was “building a mobile platform that connects shoppers, brands and influencers in order to solve one of retail’s biggest problems – helping consumers discover products they love”.

Hussein Kanji, a partner at Hoxton Ventures, said that Fy!’s rapid growth over the last two years meant it was an attractive place to deploy capital.

“The category is a huge one – over $500bn in size in the UK, Germany and US – with limited innovation and low levels of online penetration and we’re seeing significant changes in consumers’ shopping behaviours.”

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