STAGE 3, a New Delhi-based online renting platform for designer wear, is in advanced stages of discussions with a few venture capital firms to raise fresh funding, a top company executive told VCCircle.
The company is in talks with a Mumbai-based consumer-focussed venture capital firm, besides a US-based VC firm backed by former Google executives for the upcoming round. “It will be in the pre-Series A range,” said Sabena Puri, one of the co-founders and CEO of STAGE 3, without divulging further details.
Puri said the capital will primarily be used to increase its footprint across the country, besides launching new product categories. The company also counts fashion designer Rina Dhaka and Sanchit Baweja, former CEO of Buttons and Threads, as its co-founders.
“We are present in 16 cities and want to add another six to eight cities by the end of the year. Our designers are excited about the opportunity of meeting the aspirations of smaller cities,” she said.
The company, which allows women to rent a style from leading designers, procures its inventories both from A-listed designers and budding professionals.
“We purchase inventories at a 40-50% discount on MRP. Then we rent them out to our customers at one-tenth the cost,” said Puri, an alumnus of Harvard Business School and Columbia University.
The company rents out a dress at least 20 times before getting it out of the system. “We have a strong team at the backend, which ensures that only the perfect item reaches our customer,” she said.
The company's target audience is the aspirational class, including millennials, who do not have the means to access expensive outfits priced between Rs 20,000 and Rs 3 lakh.
A trendy outfit from Stage 3 to visit, say, an art gallery, would come for Rs 1,800, while designer costumes for attending a wedding could cost Rs 3,000-3,500.
In 2015, Stage 3 had secured angel funding from a bunch of individual investors, including former AOL executive Nisha Sharma, Dalmia Bharat Group’s Puneet Dalmia and Stanford University professor Balaji Prabhakar.
The startup’s advisory board consists of Anaita Shroff Adjania (fashion director, Vogue), Gautam Kalra (official stylist to Lakme Fashion Week), Arjun Sawhney (co-owner, The Communications Council) and Pearl Uppal (co-founder, Fashion and You).
STAGE 3 is modelled on Rent the Runway, an online platform that provides designer wear and accessories on rent. One of STAGE 3’s investors, Nisha, had earlier served as the CFO of the US-based company.
In India, STAGE 3 competes with FlyRobe and LibeRent – ventures that are catering to the growing tribe of aspirational middle class, which seeks to own premium and luxury brands.
Last year, Flyrobe had raised $5.3 million in a Series A round led by IDG Ventures.
The fashion segment has also seen a bit of consolidation. Last year, ethnic products marketplace Craftsvilla had acqui-hired women clothing rental platform F2SO4 recent.
Revamp My Closet, a portal that facilitated buying and selling of used clothes, accessories and bags for women, was acqui-hired by Spoyl, an online platform for buying and selling fashion wear.
Bengaluru-based online apparel rental platform Klozee, which is operated by Humble Egg Technologies Pvt. Ltd, closed operations two months ago.