Deal focus: Entering the Snoop ecosystem
As the streetwear thesis matures, East Ventures is helping bring Singapore’s Novelship, a brand-agnostic, rap star-approved marketplace, to a larger, more diverse audience
Streetwear has proven to be a dynamic niche for private equity in recent years. The Carlyle Group arguably jumpstarted the current wave of investment by exiting US skateboarding brand Supreme in a USD 2.1bn after having reportedly bought a 50% stake for USD 500m.
The first major deal in Asia came in mid-2021, when CVC Capital Partners completed a complex privatisation of Japanese t-shirt maker A Bathing Ape, also known as BAPE. The private equity firm is currently considering selling the asset at a USD 2bn enterprise valuation, according to Mergermarket, AVCJ’s sister title.
In the meantime, investor approaches to the segment have evolved. Streetwear is seen as having advantages around targeting passionate youth demographics with capital-efficient word-of-mouth marketing and online sales channels. But there appears to be a shift away from single-brand risk and toward commerce enablement.
Three deals in recent months showcase this development. In July, KKR made its first technology growth investment in Korea leading a USD 190m Series C round for K-fashion marketplace and streetwear brand incubator Musinsa. The platform has more than 8,000 local and foreign designer brands and an in-house brand.
Korea’s Kream continued the theme in August, merging with Japanese counterpart Soda in a deal that valued the latter at around KRW 224bn (USD 166m). Both companies are marketplaces for second-hand apparel touting a range of brands. They have collectively raised more than USD 340m in private funding since 2021.
In September, East Ventures led a USD 9.5m Series B for Singapore’s Novelship – touted as the fastest-growing sneaker marketplace in Asia – with support from iGlobe Partners and GSR Ventures.
“Novelship is brand and style-agnostic, which eliminates the risk aspect of changing market taste,” said Yinwei Liang, a principal at East, flagging potential to scale across adjacent markets such as collectable toys and trading cards.
“Within the collectable streetwear space, scarcity is key, which directly limits how big a specific brand can grow to, but a brand-agnostic marketplace platform is not faced with the same restriction, which makes Novelship attractive to us.”
It comes at a time of momentum for Novelship. East and GSR led a USD 10m Series A last year. During this period, revenue has grown 37% a year, while transaction volume has improved 55%. Women – an historically marginalised audience in streetwear – were targeted with a 140% surge in female-focused stock-keeping units. The user base is said to be doubling every year.
Most visually, the company agreed a collaboration with rap star Snoop Dogg last June that is hoped to extend beyond a mere celebrity endorsement.
“Snoop encompasses the broader brand, his team, network of celebrities, and connections to other global brands. This partnership allows Novelship to not only tap into the network of the broader Snoop ecosystem, but also have inputs and advise on future strategies for Novelship,” Liang said.
The plan is to grow business exposure and name recognition across Southeast Asia by sticking to a mantra of accessibility, affordability, inclusivity, and sustainability. Novelship claims to submit every item on the platform to rigorous quality and authentication checks, while using 100% recycled materials in delivery boxes.
“There are numerous global and regional players in the sneaker marketplace. The table stakes across these platforms are trust and selection, and the key differentiators are speed and price. The tech-savvy young generation will look for a particular pair of sneakers across multiple platforms, reading reviews, comparing price, and they will demand fast shipping,” Liang added.
“We expect local and regional players to have an advantage in providing cheaper and faster services, especially one where it involves the shipping bulky shoebox-sized packages. This is where Novelship has a sizeable advantage against players based in the US, Europe, or North Asia.”
More on Southeast Asia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.