The pandemic has significantly affected the global supply chain, with 60% of American adults in an August 2021 Gallup survey saying they couldn’t get a product they wanted in the last two months due to of shortages. The fashion industry is hardest hit by the impact, which employs millions of workers in retail stores, suppliers and manufacturing plants around the world. Bangladesh, one of the biggest exporters of ready-to-wear garments, saw its export revenue fall from $34.13 billion in 2018 to less than $28 billion in 2020, as brands Western countries were struggling against pandemic-related border restrictions.
Fashinza, a Delhi, India-based supply chain “marketplace” for fashion brands and retailers, was co-founded months before the disruptions. But CEO Pawan Gupta says the platform was designed to handle exactly those kinds of supply chain challenges by providing access to fulfillment options that would not normally be available to international businesses.
“By exploring [the] business to consumer fashion e-commerce [industry]we were shocked by the serpentine supply chains,” Gupta, who co-launched Fashinza with Abhishek Sharma and Jamil Ahmad, told TechCrunch via email. “Even if brands increased their selling price to 75% to 80% margins, they were still only making about 8% to 10% profit and losing money due to high inventory wastage or ‘out of stock. [They] struggled with… opacity due to multiple intermediaries and their makers thousands of miles away.
Gupta describes Fashinza’s product as “design-to-delivery” in the sense that it allows brands not only to find manufacturers and place bulk orders, but also to analyze design trends. Customers can also use Fashinza to track action time and schedules, a tool used in the garment industry to track manufacturing steps to ensure on-time delivery.
On the production side, Fashinza partners with factories to run its software stack, dubbed FactoryOS, for sampling, inventory, and finance tasks. The software tracks garment lifecycles and uses the data to train algorithms to match brands with suppliers, Gupta said, and predict metrics such as lead time.
In an endorsement of Fashinza’s approach to supply chain managementthe company announced today that it has raised $100 million in Series B funding ($60 million in equity and $40 million in debt) co-led by Prosus Ventures and Westbridge with participation from Accel, Elevation and ADQ at a $300 billion valuation. The round brings Fashinza’s total raised to $135 million, which Gupta says is being used to refine the company’s supply chain technology and expand into new markets, including materials sourcing. raw.
“B2B marketplaces are here to stay. We can’t imagine a world where, even in 2030, brands would have to make 100 calls, send 200 emails and wait six months to [a] bulk order,” Gupta said. “The whole experience is broken and doesn’t work in this fast-paced world. But the solutions… have to be vertical and highly customized for… the industries.
An expanding market
Before launching Fashinza, Gupta co-founded Curofy, a social networking app for doctors, while Sharma previously helped found e-commerce retailer OfferBean. Together with Ahmad, they launched Fashinza in 2020, which now employs 200 people. Gupta expects the roster to grow to 250 by the end of the year.
Fashinza makes money by charging vendors “usage-based” fees on every order and providing value-added services such as logistics, fintech, and business-to-business payments to brands and manufacturers. Gupta claims that Fashinza is able to save money by improve unit economics on the supply side, take advantage of “idle capacity” and “improve production efficiency” through technology and data.
Certainly, Fashinza has no shortage of competition in a supply chain management market that Statista says could be worth $30.91 billion by 2026, up from $19.58 billion in 2022. Shipium offers retailers e-commerce platform with Amazon-like supply chain technology, while ShelfLife offers a marketplace of raw material suppliers based on real-world brand needs. There are also sustainable sourcing platforms like Sourceful, which integrate somewhere alongside supply chain finance platforms including Tradeshift.
Gupta argues that Fashinza’s focus on the fashion industry sets it apart enough, underlining customer adoption so far. He says more than 200 brands and 150 factories are currently using the platform, mainly concentrated in India, Bangladesh, China, the United States, the United Kingdom, the United Arab Emirates and Vietnam.
Historically, the challenge has been convincing fashion and apparel brands to adopt technologies to modernize legacy processes, including sourcing. For example, a 2020 McKinsey study found that while 74% of brands expect the digitalization of product development and sourcing to accelerate, only 20% plan to do technology for country and supplier selection. a common practice.
But Gupta believes that Fashinza has the stuff – and the funding – to succeed. Indeed, the startup should benefit from the continued investment boom in the supply chain management market, which has experienced a $11.3 billion injected by venture capital firms last year.
“Fashinza’s solution is fundamentally technology-driven, which sets us apart from our competitors. Imagine the disruption caused by Uber and Amazon in their respective industries. Fashinza is doing something similar in the business-to-business apparel manufacturing sector,” Gupta said. “End-to-end production can be managed through Fashinza’s platform with… transparency and control – with no need for procurement managers to leave their offices, no need to depend on multiple intermediaries and no possibility of unexpected delays .