High Street Essentials, which owns omnichannel fashion brands FabAlley and Indya, on Monday, said that it has raised $2.7 million in a bridge round of funding, dubbed as ‘pre-Series C.
The round was led by existing investors, venture capital firms SAIF Partners and India Quotient.
The investment is a convertible note that will be converted during the Series C raise, a statement said. Other investors in the round include Abhishek Dalmia, chairman at financial services company Renaissance Group, and several family offices.
The fresh capital will be used to expand the brands’ D2C (direct-to-consumer) footprint with new initiatives such as a subscription-based shopping experience and catalogue curation. The company will also use AI-based (artificial intelligence) recommendations based on customers’ affinity and data mining solutions to improve reach, the statement added.
The Delhi-based startup said it has created new categories to respond to current market demands such as fashion masks, lounge-wear and formal keyboard-up dressing options.
Including the latest investment, the startup has raised a total of $16.7 million in a mix of equity and debt, according to VCCEdge data. India Angel Network and Fao Ventures are among its other investors. In January, it raised about $1.1 million in debt from venture lender Trifecta Capital.
“In the midst of this unprecedented global crisis, we are working hard to ensure that we leverage all our assets such as our nimble supply chain, data-led designing and sharp focus on customer experience so that HSE emerges as a leading fashion retail company in the industry,” the company’s co-founders said in the statement.
Launched in June 2012 by Shivani Poddar and Tanvi Malik, FabAlley is a women’s western wear label. It claims to identify global fashion trends and convert them into affordable apparel, jewellery, accessories, shoes and bags for Indian women.
The company launched Indya, an ethnic-fusion brand, in 2016, to address the contemporary Indian wear market. Subsequently in October 2019, the startup unveiled its third brand Zyra, a fashion jewellery brand.
The brands currently retail through their websites, horizontal online marketplaces, large format chains such as Lifestyle and Central, along with more than 30 exclusive brand outlets across India. During the financial year ended March 2020, the company has scaled up its retail footprint with 13 new Indya stores and five FabAlley stores, along with expanding both brands to over 400 shop-in-shops across the country.
“FY20 was a great year for HSE where we saw strong growth in both FabAlley and Indya while remaining profitable. It has also been inspiring to see the way Shivani and Tanvi have navigated through the challenges caused by the pandemic. Post reopening in June, we are already seeing healthy recovery across channels,” Mukul Arora, partner at SAIF Partners said.
In the financial year ended March 2019, the company reported a 21 times increase in net profit at Rs 1.3 crore, led by strong sales growth and lower base effect. In FY20, the company said that FabAlley and Indya have posted healthy top-line growth, even with the disruption caused due to the pandemic and are on track to close their books at a 50% year-over-year growth.