Apparel Company Custom Ink Acquires Fast-Growing Digital Disruptor Swag.com
Swag.com, the promotional giveaways startup that has doubled its sales every year since it was founded in 2016, has been acquired by T-shirt printing and customized apparel company Custom Ink.
The deal joins Swag.com, with $30 million in sales expected this year, with the much larger Custom Ink, which has about $500 million in annual sales. The purchase price was not disclosed, but the parties said Swag.com owners received both cash and equity in Custom Ink.
For Custom Ink, the deal aligns them with a digitally savvy company that is disrupting the promotional products industry with its “gifting-as-service” business model. It also gives them access to the coveted domain name Swag.com.
The acquisition “is really core to what we want to accomplish for our organization and our customers,” Marc Katz, CEO and Co-founder of Custom Ink said.
Swag.com in turn gets to join a larger company it believes will help it grow even faster.
“What we build together is probably much bigger than what we can build separately,” Jeremy Parker, co-founder of Swag.com said. “We feel there is just so much room for growth.”
Custom Ink places the market for corporate swag at more than $100 billion, but that figure includes corporate gifting of high-end items that don’t necessarily include corporate logos.
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Swag – short for “stuff we all get” or “souvenirs, wearables, gifts” depending on who in the promotional products industry you ask – is the blanket term used for T-shirts, jackets, notebooks, mugs, and other items printed with corporate logos.
Swag used to be primarily associated with trade shows, but in recent years companies, especially digitally native brands and tech startups, have used swag as a way to promote their brand name, boost employee moral or make remote workers feel part of a team.
Swag.com has created “a disruptive solution for managing an organization’s swag,” Custom Ink’s Katz said. “As opposed to just designing and ordering product, you can design, order, store, share, distribute custom products or custom kits all with just a matter of clicks,” he said
The capabilities Swag.com created to enable companies to manage their swag closet remotely, “became so, so relevant” when the pandemic hit and companies “had to figure out how to keep people connected and manage the logistics of custom products,” Katz said.
Swag.com will remain a separate brand within Custom Ink, and its founders, Jeremy Parker and Josh Orbach will continue to lead Swag.com.
Parker and Orbach launched Swag.com five years ago after deciding that the promotional products industry was ripe for transformation. They believed that the industry was still relying on catalogs, emails, and phone orders, and not keeping up with the next generation of 20-something office managers and assistants who wanted to be able to order swag on their laptops or mobile phones, and find cool products that would make them, and their companies, look good.
“Over the last 10 years the industry has not changed,” Parker said in a 2019 Forbes.com interview, “but the buyer has changed. The buyer is now a 22 to 25-year-old millennial.”
Parker and Orbach’s first business win was acquiring the Swag.com name. The owner of the name initially wanted $1 million, but they were able to negotiate the price down to $200,000.
They landed Facebook’s New York office as their first customer, with a $3,405 order for T-shirts. WeWork was their second customer with a $19,548 order for WeWork summer camp shirts.
Since its launch Swag.com has put corporate logos on Bellroy backpacks, Sonos speakers, Allbirds sneakers, and even a custom bicycle, to create unique gifts for employees and clients.
Orbach and Parker said they weren’t looking to sell Swag.com, but after being approached by Custom Ink and meeting Katz they decided the deal made sense.
Swag.com had been approached by numerous other buyers since its launch “but we were never thinking we would ever sell because we were doing so well,” said Orbach. “But we met Marc and it really was so evident that the culture and the mission and values at Custom Ink” aligned with Swag.com, he said.
Together, Orbach said, the two companies have the ability to significantly impact their industry.
Custom Ink is based in Fairfax, VA and was founded in 2000. It has grown to 2,000 employees and $500 million in sales by offering groups, companies and communities organizations an easy way to order custom T-shirts and other custom apparel online.
In 2019, an investment group lead by private equity firm Great Hill partners recapitalized the company in a deal that kept Katz as a major shareholder as other original investors exited. HarbourVest Partners, a global private markets asset manager, also became an investor then.
At the time of that investment, Michael Kumin, a managing partner at Great Hill Partners, called Custom Ink “a terrific brand with outstanding operations in a highly fragmented industry where we see huge growth potential for the company.”