Aussie undies subscription startup Manrags has smashed its latest equity crowdfunding goal, raising $400,000 in 24 hours, after adding textiles recycling to its offering led to a surge in revenues.
Founded in 2016 by husband and wife team Michael and Tina Elias, Manrags started out selling men’s socks by subscription.
Back in 2018, it raised $360,000 through an Equitise campaign, before branching out into essentials for women too.
But, last year, the founders started “questioning our purpose as well as our impact”, Michael Elias tells SmartCompany.
They were proud of the quality of products they were producing, he explains, “but essentially they end up in landfill, because there’s no home for socks and underwear in this country”.
In September 2019, Manrags launched its sock recycling scheme, and in April, it expanded to offer a full direct-to-consumer textile recycling solution.
Now, starting this week, the startup is partnering with a handful of brands, allowing them to offer the recycling service to their own customers, in what Elias calls “the Afterpay of textile recycling”.
Consumers pay $25 to have up to 10kg of textiles — no matter how well-worn or raggedy — collected from their door. That $25 can then be redeemed as credit for Manrags products.
The new eco-friendly initiatives have already translated into business success.
“Things just blew up,” Elias explains.
“People were advocating for us through buying products from us, as a result of the goodwill we were doing in terms of our textile landfill impact.”
In fact, some 43% of people who have used the recycling service have become repeat Manrags customers, he says.
“It was almost like our calling … When we do good, good things happen.”
Over the past eight months, Manrags has seen a 400% increase in its customer base, and revenue growth of 220%, Elias says.
Each month has seen revenue growth of between 17% and 60%, he adds.
“And we’ve only just started. The textile recycling is less than three months old.”
Even throughout the COVID-19 pandemic the business has been growing and hiring. It’s opened a second warehouse, and as I spoke to Elias he was just about to take a look around what could become the third.
“Australia wants this, we’re providing a unique service,” he says.
Focus on impact
This is partly why he believes the company’s latest equity crowdfunding campaign, this time running through Birchal, has captured the interest of investors so quickly.
At the time of writing, the investment offer had attracted $444,000 from 401 investors, with nine days still to go. The startup is seeking up to $2 million in total funding.
“From an investor perspective, we’re appealing to a number of people”, Elias explains.
First of all, there’s a financial opportunity in waste management, he says, which is “quite a profitable sector”.
But, Manrags is also a profit-for-purpose business, tackling a very pressing issue. And, weirdly, COVID-19 has made this the perfect time for an initiative like this, Elias suggests.
If there’s a silver lining to come out of the crisis, it’s the positive effects we’ve seen on the environment, he says.
“People are going, ‘shit we do make an impact here’,” the founder says
“We can see a brighter future, and while it’s not nice being in isolation, it is nice to walk outside and not have a street full of cars.
“I think some of that has helped a little bit.”
At the same time, the lockdown period in Australia has had many people cleaning out their wardrobes and shedding clutter. Those same lockdowns meant the usual charities and op shops, that would be a destination for surplus clothes, were closed to both shoppers and droppers.
“Because our solution is digital, people can conveniently make an impact from their house, without leaving their front door,” Elias says.
Charity shops also only take fit-to-wear items, and anything that doesn’t make the cut typically ends up in landfill. Even the most ripped shirt or holey sock can be sent to Manrags for recycling, Elias explains.
“We’re doing things differently — it’s innovative, it’s new, it’s a new way of thinking.”
The ‘Afterpay of textile recycling’
Once the funding round has closed, Elias and the Manrags team have their work cut out for them.
Firstly, the startup has today launched its “Afterpay of textile recycling” initiative.
The current textile recycling platform will be made available for other fashion brands to offer to their own customers and communities.
“We’ll be able to report their impact and the impact they’ve made,” Elias explains.
“Let’s help other businesses grow while also doing a good thing.”
Also among the first things the founders are planning is a rebranding exercise.
“We’ve well and truly outgrown our name,” Elias says.
While ‘Manrags’ made sense for a men’s sock subscription, “that’s no longer who we are”, he admits.
Finally, Manrags (or whatever the business will then be known by) will be working with a range of partners in Australia to figure out a way of recycling textiles onshore, and reducing the carbon footprint of the whole process.
There’s “a real big opportunity” in figuring out how to commercialise end-of-life products, he says.
“But it probably will require a fair amount of investment.”
“The opportunity is great, the market is there — we’ve validated that people want this,” Elias explains.
Even from a government perspective, there’s a growing focus on the circular economy and waste solutions, he says.
“We’re doing everything to move from pioneers in textile recycling to the authority in textile recycling.”