Fashion rental and styling platform Stage3 on Wednesday (October 23) said it has raised $2 Mn in a Pre-Series A funding round led by Blume Ventures.
The fresh capital will be used by the fashion startup to amplify the brand experience, the company claimed in a press statement, and added that it would also boost its offline footprint for the omnichannel play, augment its data capabilities presumably for procurement and designs, while solidifying Stage3 as the pre-eminent platform for design-led fashion at affordable prices.
Founded in 2016 by Sabena Puri, Sanchit Baweja and leading fashion designer Rina Dhaka, the Delhi-based fashion startup works with more than 100 designers, 25 celebrity stylists and more than 50 celebrities. The brand focusses on providing affordable access to on-trend, glamorous fashion through rental and sales. The fashion rental startup primarily targets fashion-forward millennials through its selection of celebrity-endorsed designer outfits and accessories.
The fashion rental startup registered revenue growth of 350% YoY and claims to have consistently recorded high repeat rates and unit economics. Stage3’s asset-light model relies on inventory linked to revenue-sharing and this accounts for 80% of its current inventory. In 2020, the company plans to collaborate with several prominent celebrities, influencers and designers.
“Through our offerings, we want to bridge this gap and help our customers be on top of today’s fashion game without having to worry about high pricing, seasonality or storage woes. The sharing economy is going to change the way we consume fashion in India,” said Stage3 CEO and cofounder Puri.
The fashion rental startup follows a two-pronged approach. First, it makes expensive designer wear available to millennials at a fraction of the MRP through a rental business model. Second, it simultaneously sells capsule collections of “elevated basics” via its home-grown fashion brand Alaya, by leveraging collective purchase trends and data insights from customers.
Cofounder Baweja, who is the chief business officer, said the company’s growth includes the omnichannel model and data-driven customer insights. “We plan to invest heavily in enhancing our data capabilities as well as focus on building greater awareness amongst our target audiences about the rental model we are operating with,” he added .
Fashion Startups Stay In Style
While ecommerce fashion is ruled by the likes of Myntra, Shein, Club Factory, the rise of private labels and unique business models to make designer fashion more accessible is backed by the increasing investor interest in this segment.
Stage3 rides the sharing economy ecosystem wave in India by offering fractional ownership and makes premium fashion more accessible. It also lets its users list their own designer wear to be rented by others via the platform. All of the platform’s offerings are complemented by the company’s in-house stylists, who provide fashion and styling advice to users for free.
Online fashion retail market is expected to touch $35 Bn by 2020, according to a media report. The report also spoke about Google research that said that every third shopping search from the country is fashion-related and the queries in the category are growing at 66% year-on-year.
In the past couple of years, many fashion startups have been trying to capture this market and thereby the investor interest.
In July this year, Mumbai-based fashion label House of Masaba raised $1 Mn in a funding round led by Flipkart cofounder Binny Bansal. Purple Style Labs, Apoorva Patni of Patni Group, and Apurva Salarpuria of Salarpuria group also invested in the fashion startup in the round.
Celebrity Rannvijay Singha’s Mumbai-based fashion retail startup Disrupt raised an undisclosed amount in Pre-Series A funding in May this year. Founded in 2018, by Singha and Shakeef Khan, Disrupt combines utility, street style, and quality for all the casual wear outfits. The startup claims to have amassed over 12 Mn unique brand impressions using influencers with varied affinity including top influencers.