Deal focus: Grana takes fashion to the information edge

In 2013 the Asian e-commerce boom was in full swing, and Australian entrepreneur Luke Grana wanted in on the action. He also had a strategy in mind that would set his business apart while also delivering efficiency.

"What we're trying to do is create a model that's really lean and efficient and centralized in Hong Kong, so we're able to ship direct and serve a global market," Grana says of the fashion e-commerce start-up that shares his name. "And with this direct shipping model, we can really provide high quality at prices that the market has never seen before."

Now, with a $10 million Series A round led by the Alibaba Group's Hong Kong Entrepreneurs Fund and supported by existing investors Mindworks Ventures and Golden Gate Ventures, the company is targeting expansion.

Although Grana may appear a latecomer to the e-commerce space, it seeks to set itself apart by using technology to reduce staff headcount (through automation) and offer competitive prices to the end consumers. This means that in some ways the company acts more as a middleman, connecting fabric mills in various countries - including a linen factory in Ireland, a Mongolian cashmere maker and a Japanese denim mill - with clothing factories in China, and shipping the resulting products from Hong Kong via DHL.

While much of the process is outsourced for efficiency, the company maintains control at key points in the design and logistics phase, storing all products in its Hong Kong warehouse before sending them out worldwide.

"The big advantage that we have, being based in Hong Kong and shipping to a global market, is that we can scale very quickly," Luke Grana says. "From day one we were shipping to eight countries, where a traditional retailer obviously has to invest time, resources and money setting up shops and teams in a lot of different markets."

Currently Grana ships to 12 countries, and claims to be able to satisfy all orders within 48 hours. Instead of logistics, the biggest challenge is marketing to its various markets without an on-the-ground presence. To compensate for this, the company has expanded its digital marketing operations by reaching out to online opinion drivers and social media to help spread the word.

Grana's immediate plans include expanding in existing markets, particularly the US - its biggest growth market so far - and opening up new markets. It has set itself the ambitious goal of shipping to 200 countries by 2020, including China, which it plans to enter next year with the support of Alibaba Group.

"I think a lot of investors have really liked what we're doing, because we have proven our unit economics and how to scale and find customers in a very cost-effective and cheap way," Luke Grana says. "So I think we have proven our initial model and now we're going into our expansion and scaling phase."

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• Topics
• Greater China
• Early-stage
• Technology
• Consumer
• TMT
• Hong Kong (China)
• Venture
• Alibaba Group