Online tailor start-up InStitchu has secured a six-figure investment from venture capital group Aura Capital, taking its valuation to $2.5 million.
More than 50,000 suits have been created through the site since it launched in 2012. Co-founder and director James Wakefield told StartupSmart the funds would go towards growing the team in order to scale quickly.
“We’ve got to the level where we could self-fund our growth, albeit a bit slower, but with this cash we can expand our product line, broaden our reach across Australia and possibly to expand internationally,” Wakefield says, declining to give the value of the investment.
He says they will be focusing on expanding and developing their team to drive the growth and are looking to open in the United Kingdom in the next few months.
“We learned pretty quickly that the most important aspect is having people who are smarter than both of us around, so we’re going to be investing in our team,” Wakefield says.
Primarily an online store, Institchu also has a physical boutique for consultations in Sydney. Wakefield says the new funds will enable them to explore physical premises in key locations.
“There are two very clear channels for us, online and offline. We’re looking to open up physical premises in Melbourne and Brisbane, and possibly across the nation. Internationally we’ll be looking to replicate exactly what we have going here, including the store,” Wakefield says.
While Wakefield says they never sat down and worked out a capital raising strategy, he says the team has been in conversations with Aura Capital for over a year. He adds they were attractive to the Aura team because they were disruptive and scalable.
Calvin Ng, partner at Aura Capital told StartupSmart, they were drawn to InStitchu because of the passion of the co-founders and how well the investment would fit in their wider portfolio.
“James and Robin are true entrepreneurs. They live and breathe the product and business,” Ng says, adding they haven’t ruled out investing more in the future. “There are a lot of synergies between our existing e-commerce assets. We want to add value where we can but it’s really their baby, so we want to facilitate them to achieve their vision and give strategic input along the way.”
Ng says it was a mutual courting process, and while the pitch had originally “slipped through the cracks”, they were very interested after their first face-to-face meeting.
“Once I met them and saw the quality of what they were doing, understood the investment time in developing the business and building the supply and logistics side, it made a lot of sense,” Ng says.
“A suit business is very much an annuity business, if you can get it right you’ll have them for regular purchases for the rest of their life, but that didn’t dawn on me until meeting with the guys.”
Aura will be taking a seat on the InStitchu board and will be looking to connect the start-up to businesses in their wider portfolio.