Gen Z-focused fast fashion brand NEWME made headlines earlier this year by raising US $ 5.4 million (Rs. 45 crore) in a seed funding round led by Fireside Ventures at a time when India’s start-up sector has entered a ‘funding winter’ as investors become stricter with their financial assessments. Founded in 2022 by Sumit Jasoria, Shivam Tripathi, Vinod Naik and Himanshu Chaudhary, the Bengaluru-based start-up caters to women aged 16-24. Competing with brands like Absolute Brands, Snitch, Styched and Virgio amongst others, NEWME asserts that it’s currently operating at an annual revenue run rate amounting to ‘several hundred crores’ while continuing to scale at a fast speed. Currently present in four stores, NEWME plans to increase its stores tenfold in the next 12 months.
In an exclusive interview with Apparel Resources, Sumit Jasoria, Founder and CEO of NEWME, revealed that over 600,000 Gen Z women across India have already embraced their brand, with a goal to connect with an additional one million Gen Z women nationwide. Sumit mentioned that their highest-selling items include dresses (40 per cent – 45 per cent of sales), tops and bottoms (each comprising 15 per cent – 20 per cent). The remaining percentage is attributed to other popular items in their product lineup. Additionally, he discussed fundraising strategies during challenging times, shared insights into sourcing strategies, outlined future plans and more. Here are the edited excerpts.
AR: Every brand has a story. What’s yours?
SJ: Our journey began in July of 2022, guided by a shared vision amongst four of us to cater to the evolving needs of Gen Z young women consumers who seek latest fashion trends with statement pieces and seamless shopping experiences. At NEWME, we are fast ascending to a prominent position within the market, pioneering the fusion of ultra-fast fashion and cutting-edge technology in India.
AR: How difficult it was to raise funds in the first place?
SJ: Our fundraising journey was quite tough as we started building NEWME at the prime of funding winter across the start-up ecosystem but I think this allowed us to build the main fundamentals of business with a strong foundation. None of the investors believed in our vision and only a very few funds decided to support us in our journey of building NEWME.
However, through persistence, we secured a successful seed funding round of US $ 5 million, led by Fireside Ventures, with significant contributions from AUM Ventures, 2AM Ventures and Allin Capital. This follows our earlier achievement of raising Rs. 30 crore in funding.
The infusion of capital is poised to catalyse our expansion into the physical realm, with plans to inaugurate 40-50 stores across 20 key cities within 12 months. These cities encompass crucial hubs such as Delhi-NCR, Pune, Hyderabad, Ahmedabad, Jaipur, Guwahati, Shillong, Chennai, Kolkata and Bhubaneswar, with multiple outlets collectively spanning over 1.5 lakh square feet of prime retail space.
Simultaneously, a substantial portion of the funding will be allocated towards optimising our supply chain infrastructure and spearheading technological innovations to fortify and expand our manufacturing capabilities.
AR: How can fashion brands effectively raise funds?
SJ: While navigating the current start-up funding climate, fashion brands can strategically position themselves to attract capital by demonstrating resilience, innovation and a clear path to sustainable growth. Amidst market fluctuations, exhibiting resilience is paramount. Fashion brands must showcase their ability to adapt to changing dynamics, pivot when necessary and maintain operational agility.
Whether it’s leveraging technology to enhance the customer experience or introducing sustainable practices in production, innovation captures investor attention. Also, venture capitalists seek start-ups with the potential for sustainable growth. Fashion brands should articulate a clear roadmap for expansion, backed by robust financial projections and a focus on achieving healthy
unit economics.
Demonstrating prudent financial management is essential. Brands should prioritise efficiency in resource allocation, optimise operational processes and maintain transparency in financial reporting to instil investor confidence.
Lastly, collaborating with strategic partners can amplify brand visibility and credibility. Whether it’s forging alliances with established retailers, influencers or industry leaders, partnerships can facilitate access to funding and unlock growth opportunities.
AR: What is your target audience and where are they located?
SJ: Our target audience at NEWME comprises the dynamic and fashion-forward Gen Z girls. Our clientele spans across Tier-1, Tier-2 and Tier-3 cities, allowing us to intimately understand the diverse needs and fashion aspirations of urban dwellers as well as those from smaller towns. Our sales data reveals that the top five cities contributing significantly to our revenue are regions like Delhi-NCR, Mumbai, Pune, Hyderabad and Kolkata. These urban hubs have consistently shown strong demand for our products. However, what sets NEWME apart is our substantial sales traction in Tier-2 and Tier-3 cities across India. Currently, these cities account for nearly 60 per cent of our total sales volume.
Most of our online shoppers discover us on Instagram. We have one of the highest engagement rates on the social media platform in our category. This has been possible by challenging the status quo of communication with the audience.
As a young brand, we are focused on strengthening our offline presence as well. Currently, NEWME has four stores (two in Bengaluru, one in Mumbai and a newly launched one in Chandigarh). We often put up pop-ups in various cities and have received lots of love and feedback from our customers which has helped us gain brand visibility in those cities. Also, we are running a program with our campus ambassadors (from colleges/universities) and native influencers to seek feedback.
AR: How do you understand your customers’ needs and ensure they become repeat customers?
SJ: Our approach to staying updated on the latest trends and translating them into NEWME’s product offerings is rooted in direct interaction with our customers. Through digital channels and in-store interactions, we glean valuable insights into their preferences, feedback and evolving style sensibilities. Hosting pop-up stores in various cities further facilitates face-to-face engagement and brand loyalty enables us to host meet-and-greet sessions with our loyal customer base.
Moreover, we’ve adopted a curated approach to our product offerings based on customer feedback. Recognising that Gen Z buyers prefer a well-balanced selection of designs over an overwhelming array of choices, we streamlined our styles with an intense focus on curation. Additionally, we’ve debunked conventional e-commerce wisdom by understanding that Gen Z individuals seek distinctive pieces that stand out from the crowd, rather than opting for styles with a high number of reviews.
AR: What are your expectations for the future of the women’s apparel market in India?
SJ: In the coming years, India’s women’s apparel market is poised for significant growth and transformation. With the fashion e-commerce market projected to surpass US $ 18.76 billion by 2030, exhibiting a remarkable CAGR of 34 per cent, India stands as a key driver of expansion in the global apparel industry.
The country’s large and burgeoning middle-class fuels an increasing demand for apparel, presenting lucrative opportunities for brands to thrive and innovate. Moreover, the adoption of new technologies such as 3D printing and artificial intelligence is poised to revolutionise the entire apparel value chain, from design to distribution. These advancements enable brands like NEWME to enhance efficiency, agility and product innovation, thereby carving out a unique market positioning.
Additionally, the rise of Direct-to-Consumer (D2C) brands has reshaped the apparel landscape, leveraging digitalisation and e-commerce to flourish and transform the Indian market. NEWME embraces this trend, leveraging digital platforms to engage directly with consumers, deliver personalised experiences and build enduring connections. Our Formula-1 collection is just one example of our dedication to innovation and trendsetting.
AR: Can you provide details about your sourcing strategy?
SJ: Unlike conventional approaches, we have developed our proprietary technology stack, which empowers us to exercise precise control over the entire production process, from sourcing materials to final delivery. The technology stack is the backbone of our business which allows us to launch hundreds of designs on a weekly basis with industry lowest MOQs and shortest turnaround time. Our partners are based in a consolidated region and our approach here is inspired from the car manufacturing companies where all ancillary companies are set up near the manufacturing plant to ensure cost and time optimisation. Our partners adhere to the strict timelines and processes built by us over the last 22 months. Partners need to follow strict timelines and processes to continue working with us and we invest on training the partners and their people from time to time to match the speed of execution of NEWME.
Currently, over 40 per cent of our merchandise is sourced from India, reflecting our strong commitment to supporting local industries and leveraging the expertise and craftsmanship available within the country.
While a significant portion of our merchandise is currently sourced domestically, we maintain a global outlook in our sourcing strategy, ensuring that we have access to a diverse range of products and suppliers from around the world.
