Styletag.com, an online curated fashion and lifestyle startup, announced that it has raised Rs 50 crore in angel funding from Jitu Virwani, Chairman and Managing Director, Embassy Group. Jitu Virwani has made the investment in his personal capacity and Styletag confirmed that he is currently the only participating angel investor. Importantly, his seed round is probably the biggest seed round ever invested in any startups in India.
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Story so far
Based out of Bangalore and also currently operational in Delhi-NCR and Mumbai, Styletag.com was brought into existence in 2012 by Sanjay and Yashodhara Shroff along with three other technology professionals from the industry -- Vivek SP (10 years of IT experience with Infosys), Prashanth HN (one of India's leading technology bloggers) and Soujanya Sreenath (software engineer and web designer).
This team of five identified a severe dearth in affordable and credible fashion available across India, especially in Tier 2 and Tier 3 cities. So Styletag was created with the aim of triggering a liaison between the best of couture and affordable fashion for people based in and around smaller cities across the country. The company currently consists of a team of about 100 employees.
Yashodhara and Sanjay Shroff had previously founded ffolio, a multi-designer luxury retail store in southern India, in 1991. They were able to etch a niche for their brand in luxury retail and were responsible for pioneering the concept of in-house fashion presentations, curated fashion and styling advice and co-branded fashion events in India. Taking a cue from their 20 plus years’ of experience in the industry, they considered Styletag.com to be a natural progression to gravitate towards the online medium.
With a thorough understanding of the fashion quotient of both Indian men and women across age groups, Styletag.com aims to offer fresh fashion every day, through blend of ethnic and western wear. The company claims that all the products on their platform are hand-picked and provided to the shoppers through flash sales, that are put up for a limited period. They ensure authenticity on all merchandise being sold by sourcing them directly from the manufacturer, or a licensed agent, a retailer, or an importer.
Talking to YourStory, Sanjay Shroff and Vivek SP spoke about their current status and their future plans going forward. Currently, Styletag sees a healthy mix of orders coming from both metro and non-metro cities mainly from women in the age group of 20s to 40s. Sanjay added, "But our sweet spot is women in the age group of 24-35 and our average basket size for every transaction is a healthy Rs 3500."
The company will use the raised funds to further expand their range of private labels, acquire a medley of other designer brands and strengthen its team to complement their capabilities. Commenting on his funding of the Styletag venture, Jitu Virwani, Chairman and Managing Director, Embassy Group, said,
Similar investments have been carried out in the past from my end into projects that have been fruitful. I find the start-up e-commerce space a very exciting one and it is an extremely dynamic and upcoming market. Through similar investments, I want to encourage players in the startup space.
Sector overview and future plans
Fashion as a sector has gone through a lot of changes in India. Many e-commerce players now focus on offering personalization to help consumers buy clothes according to their inidividual tastes. Tiger Global-backed Roposo is positioning itself as a fashion focused social media platform. E-commerce platforms such as Myntra and Jabong have gone from pure-play marketplaces to marketplaces or platforms that focus on personalization with Myntra having its own product line.
Voonik, which was one of the early starters in the personalization space in India, raised $5M from Sequoia Capital and Seedfund in June this year. Limeroad, a social discovery platform for women, had raised a $30M Series C round from Tiger Global and other existing investors in March 2015. Styletag competes with these players but aims to stand out as their modus operandi is flash sales.
Going forward, Styletag.com foresees scaling up to 100 omni-channel models across the major cities in India in less than two years and becoming a prominent player in the fashion segment. While its brick and mortar presence will aid in brand building, the company aims to aggressively retail through online commerce to successfully reach out to style aficionados.
The company is looking to establish its Gross Merchandise Value (GMV) between Rs 50 to 70 crore by the end of this year. The company also claims that its current growth projections indicate that they will soon achieve the milestone of one lakh unit orders this festive season. While most of their current transactions have been on their desktop website, Styletag aims to ride the mobile wave in India going forward.
They recently optimised their website to provide a better mobile experience and are currently working on their mobile app, which they aim to launch within the coming month.
The fashion space currently has a lot of players, each with their own unique USPs and currently there is no clear winner. Styletag follows flash sales model and has focus on affordable luxury segment.
The company competes with Perinia’s Pop Shop, Fabity, and a few others. Flash sales is touted as a big opportunity globally and success of startups like Gilt is testimony to this belief. Early evangelizers of the format in India like FashionandYou had pivoted from it while Exclusively.in sold out to Myntra.
In a price sensitive market like India with no clear brand loyalties (especially in flash sales model), it will be interesting to see which players sustain and succeed in the long run. With the flavor of fresh fashion, style and strong team it will be interesting to see how Styletag scales its operations further and reaches out to more consumers.
(With inputs from Jai Vardhan)