Noida-based High Street Essentials Pvt Ltd, which owns and operates FabAlley.com, an online women’s fashion brand, has raised Rs 5 crore ($785,000) in venture debt from Trifecta Capital, a company statement said.
Tanvi Malik, co-founder of FabAlley, said that the firm will use the funds to expand its offline presence from three stores to 25 stores over the next 12 months.
Besides, the six-year-old company will foray into the top metros, she added. Offline sales channels currently account for around 15% of FabAlley’s overall revenues.
“We have a clearly identified a use case for debt as we move towards a more aggressive omni-channel growth strategy. Offline expansion is a more capital intensive proposition and funding these capex requirements is best done through debt which is lower cost capital as compared to equity,” Shivani Poddar, co-founder of Fab Alley, said in the statement.
In October 2016, FabAlley had raised $2 million (Rs 13.42 crore) in a Series A round of funding led by India Quotient. FAO Ventures, Indian Angel Network (IAN) and a group of angel investors including Tushar Singh and Ranjan Sharma had also participated in the round.
Launched in June 2012 by Poddar and Malik, FabAlley offers design-differentiated and fashionable clothing and accessories for woman on-the-go. The brand identifies global fashion trends and converts them into affordable apparel, jewellery, accessories, shoes and bags for Indian women.
In July 2016, FabAlley ventured into the offline segment through a tie-up with Central Mall, the multi-brand store operated by the Future Group. While FabAlley is the flagship western wear private label of the brand, it also owns two sub-brands catering to plus size women, Curve and FabAlley Plus. Indya is its Indo-western fusion collection. In an interaction with VCCircle in November last year, Poddar had said that the Indya brand accounted for nearly 30% of its online sales.
FabAlley is on track to clock Rs 100 crore in gross merchandise value in 2017-18, exhibiting a 100% growth over the previous financial year. The company turned EBITDA positive in the last three quarters in 2017-18 and is expected to sustain an EBITDA positive rate of over 5% in the next 12 months even as it continues to grow, the statement said.
“Online fashion is growing at around 50% CAGR and is expected to be a $20-billion market by 2020,” Nilesh Kothari, co-founder of Trifecta Capital, said.
Poddar had also told VCCircle that there was a significant gap in the fashion accessories space and Faballey will soon retail handbags, jewelry, and shoes. It will also scale up its offerings in the already existent nightwear and lingerie categories.
In the broader fashion and lifestyle space, a few ventures have recently raised funds. Last month, Bangalore-headquartered eyewear brand Glassic raised an undisclosed amount in seed investment from a group of angel networks which includes The Chennai Angels, Lead Angels and LetsVenture.
In the same month, Bengaluru-based online lingerie retailer Buttercups Intimates also raised an undisclosed amount in a fresh round of funding from Google India’s managing director Rajan Anandan and US-based angel investor Chandra Chappadi.
Like this report? Sign up for our daily newsletter to get our top reports.