Fast-fashion company Snitch has raised Rs 110 crore in its Series A round co-led by Singapore’s SWC Global and IvyCap Ventures, the startup said on December 13. SWC Global backs several consumer tech companies like Meesho, Country Delight, Sharechat, Kuku FM in India and globally, it has backed Gojek and others.
While the direct to consumer firm did not comment on its valuation, D2C brands in the same space typically command a revenue multiple of four to six times, which will work out to about Rs 400 crore for Snitch.
The investment comes at a time when D2C companies are growing slower than anticipated, largely because they’re coming off of high growth witnessed during the pandemic years. Several D2C companies have consolidated with larger companies since they said it was difficult to scale revenue in a sustainable manner.
This funding of about $13 million is Snitch’s first large round after it raised money from Lenskart’s Peyush Bansal, Boat’s Aman Gupta and others when the company, which sells directly to consumers, appeared on Shark Tank earlier in 2023.
In January 2023, Snitch had said it had an annualised revenue run rate (ARR) of Rs 100 crore and was profitable.
While startups can go from 0 to Rs 100 crore in revenue, unlocking the next phase of growth has been a challenge, as Moneycontrol has written.
Snitch will use the money to expand its offline footprint, hire more people and better its tech capabilities.
"Our focus on delivering exceptional value through our online platforms, coupled with our burgeoning offline presence, positions us well for future growth,” Snitch founder Siddharth Dungarwal said in a statement.
Ashish Wadhwani, co-founder and managing partner of IvyCap Ventures, will join Snitch’s board as part of the investment plan.
For SWC Global, the investment in Snitch cements its belief in fast fashion. “Our decision to invest in Snitch is rooted in our belief in their visionary approach to fast fashion. Snitch's impressive performance, especially in a challenging economic landscape, is a testament to its innovative business model and deep understanding of consumer needs," SWC Global founding partner Tuck Lye Koh said.
In fast fashion, where companies like Zara, H&M, Tata's Zudio and the like are active, clothes are typically not repeated several times and are discarded after being used a few times. While, some companies are against the idea, the others see a bright future.
SWC Global's conviction in fast fashion was despite companies, like Virgio which was started by former Myntra chief Amar Nagaram, pivoted because the traditional concept of fast fashion was not relevant anymore.
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