Sydney-based fashion-sharing startup GlamCorner has raised $4.2 million in a Series A funding round led by AirTree Ventures, as it continues its quest to secure a piece of Australia’s $9 billion market for women’s apparel.
Other first-time investors have also come on board this time around, including Marshall Investments, which owns the Sportscraft, SABA and JAG brands; Sass & Bide co-founder Sarah-Jane Clarke; Silicon Valley-based Partners for Growth; and Impact Investment Group’s Giant Leap.
Founded by husband and wife duo Dean Jones and Audrey Khaing-Jones in 2012, GlamCorner allows users to rent designer dresses for between 10-15% of the cost of purchasing those dresses off the rack.
“We’re providing a platform that allows women to consume fashion in a different way, and what we believe is a better way,” Jones tells StartupSmart.
“We realised that Australian women have been getting a bad deal for quite a long time when it comes to certain elements of the fashion and apparel space, particularly when it comes to event wear; they’re buying once and throwing items out.”
Jones says the rise of the sharing economy has meant an “increasing proportion” of women are looking to rent instead of buy their one-off event wear, indicating a “long-term and permanent shift” in consumer habits.
“We’re putting a real dint in the $9 billion women’s apparel market in this country,” he says.
The clothes sharing economy has taken off both in Australia and internationally, with Rent the Runway offering a similar service in the United States and raising a $US60 million ($75 million) in Series E funding late last year. Closer to home, offerings like Your Closet, HerWardrobe, SomethingBorrowed and DesignerX sit alongside GlamCorner, however the Sydney-based startup says its “significantly larger” volume of inventory offers a key point of differentiation from its competitors.
“We’ve got 3,000 dresses available for hire now — ten times more than our next best competitor,” Jones says.
“It’s a very fast growing space,” Jones concedes. GlamCorner is attempting to set itself apart from its competition by acting as a “customer-centric organisation” and logistics platform that offers for next-day shipping across Australia, and delivery within three hours in Sydney, says Jones.
GlamCorner has grown 500% in last 12 months in terms of revenue and new customers, according to Jones, and now boasts a customer base “in the tens of thousands”.
The company now plans to use its latest funding to “give a greater level of scale to the already successful formula”, which includes expanding its inventory and investing in logistics and technology to ensure faster delivery.
“Numbers don’t lie”
This is the third time AirTree Ventures has invested in GlamCorner, and Jones nominates good communication and a metrics-driven approach as key factors in maintaining investor relationships.
“Understanding investors want you to succeed, keeping communications lines open, and keeping a focus on profitability” are crucial to keeping investors coming back through seed, Series A, B and C funding rounds, says Jones.
He also emphasises the importance of finding investors that mix “profit with purpose” to build meaningful long-term relationships, suggesting startups should “meet investors way ahead of time” leading up to funding rounds to allow time to find investors who “see the value in supporting your vision”.
Jones also suggests startups should focus on “unit economics” to show investors their business is profitable and viable in the long-term.
“Until a business is at least at the base per-unit level profitable, it’s sort of a glorified hobby,” Jones says, advocating for a strongly numbers-driven approach when pitching to investors.
“Numbers don’t lie — it doesn’t matter what the industry and sector, a profitable business is a profitable business. Stick to those fundamentals … and you’ll have success not just for your funding round but for a very long time after it,” he says.
“Funding rounds don’t drive value, free cashflow drives value.”
A sustainable model
GlamCorner now has over 40 employees and has processed the retail equivalent value of $20 million in designer fashions through the site, according to Jones. That amounts to 2 tonnes of clothing being used and re-used per week, or 8-10 tonnes a month of sustainable, shared fashions.
“We’re really proud of that — it’s part of our DNA,” says Jones.
“Given Australian consumers send six tonnes of clothing to landfills every ten minutes, sharing clothing alleviates the environmental impact [of the fashion industry] significantly by allowing many different women to share the same item.
“Collaborative consumption is not just about being great for people’s back pocket, but also great for the planet and society.”