India fashion supply chain player Fashinza raises $30m

Liquidity is investing in its own right and via Mars Growth Capital, its Singapore-based joint venture with Japan’s MUFG Bank. It is their first investment in Fashinza, which has now raised more than USD 150m in debt and equity since October 2020.

Prosus Ventures and WestBridge Capital led a USD 100m Series B round in May last year with support from Accel, Elevation Capital, and Abu Dhabi government investor ADQ. Previous investors also include Alteria Capital, Stride Ventures, TradeCred, and an accelerator run by e-commerce giant Flipkart.

Fashinza is essentially a middleman for mostly Western fashion brands and mostly Asian clothing manufacturers. The idea is to update the industry’s offline “buying agent” model, whereby various third-party vendors connect brands with factories and raw materials suppliers but provide no visibility on the latter’s operational practices.

It serves two significant trends in fashion: the social media-influenced rise of boutique brands and faster design-to-launch timeframes; and growing customer demand for sustainable manufacturing and distribution processes. As a result, competition is spiking in an increasingly fragmented market, which relies on a more time-sensitive and scrutinised supply chain.

“Fast fashion and online sales trends are moving all the time, and one has to respond. If you’re thinking about what your spring or summer collection is going to be next year, you need this transparency for a quick turnaround,” Ashutosh Sharma, Prosus Ventures’ head of India, told AVCJ last year.

“A few years ago, there were 200 days from design to launch of a range, and so brands had that much time. These days, brands want to fix the design and retail it within 32 days in some cases. That kind of turnaround can only be possible through the use of technology and a platform like this.”

The fresh capital will allow Fashinza to meet growing international working capital requirements as it pursues an expansion across the US, the Middle East, and Europe.

“With their flexible cross-border financing solutions and extensive knowledge of navigating international markets, we are confident that we can successfully penetrate new markets and provide our manufacturing solutions to key clients worldwide,” Abhishek Sharma, co-founder of Fashinza, said in a statement.

It coincides with an investment in Indian online casualwear apparel brand The Souled Store, reportedly totalling around USD 16m from Xponentia Capital, Elevation Capital, and RPSG Capital. Souled raised about USD 14m across two rounds in 2018 and 2021, according to AVCJ Research.

Recent activity in Indian fashion includes Reliance Retail Ventures acquiring lingerie retailer Clovia and design house Rita Kumur, with the latter providing an exit for Everstone Group. Previously TA Associates invested USD 140m in TCNS Clothing, which specialises in modernised versions of traditional Indian garments for women.

Founded in 2018, Liqudity Group provides debt financing to mid-market late-stage technology companies, using what it calls a machine learning-based decision science technology. Last year, Apollo Funds, MUFG Bank, and Spark Capital committed USD 775m to support its global lending operations.

Mars Growth was set up by Liquidity and MUFG Bank in 2020 to provide debt and equity to Southeast Asian and Middle Eastern start-ups at the Series B and C stages. It manages three funds, including a unicorn-focused fund said to be able to write cheques of up to USD 100m within 72 hours.

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• Topics
• South Asia
• Consumer
• Support services
• Expansion
• India
• venture debt
• Liquidity Group
• Prosus Ventures
• WestBridge Capital Partners