The pandemic has severely affected the global supply chain, with 60% of US adults in an August 2021 Gallup poll saying they have not been able to get a product they wanted in the past two months due to shortages. Carrying the brunt of the impact is the fashion industry, which employs millions of workers in retail stores, suppliers and manufacturing facilities around the world. Bangladesh, a major exporter of ready-made garments, saw export earnings plummet from $ 34.13 billion in 2018 to less than $ 28 billion in 2020, as Western brands struggled with border restrictions related to pandemic.
Fashinza, a supply chain “marketplace” based in Dehli, India, for fashion brands and retailers, was co-founded months before the disruptions. But CEO Pawan Gupta says the platform was designed to handle exactly these types of supply chain challenges by providing access to fulfillment options that would not normally be available to international businesses.
“While exploring [the] business-to-consumer fashion e-commerce [industry]we were shocked by the serpentine supply chains, “Gupta, who jointly launched Fashinza Abhishek Sharma and Jamil Ahmad told TechCrunch via email. “Even though brands were increasing their retail price by margins of 75% to 80%, they were still making only about 8% to 10% of profits and losing money due to high inventory waste or out of stock. [They] struggled with … opacity due to the fact that multiple intermediaries and their producers were thousands of miles away.
Gupta describes Fashinza’s product as “from design to delivery”, meaning that it allows brands to not only find manufacturers and place bulk orders, but also analyze trend models in fashion. Customers can also use Fashinza to track timing and action calendars, a tool used in the apparel industry to track manufacturing milestones to ensure timely deliveries.
On the manufacturing side, Fashinza works with factories to run its software stack, called FactoryOS, for sampling, inventory and finance. The software tracks garment life cycles and uses the data to train algorithms to match brands to suppliers, Gupta said, and predicting metrics like delivery times.
In an endorsement of Fashion’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) led by Prosus Ventures and Westbridge with the participation of Accel, Elevation and ADQ for a valuation of $ 300 billion. The round brings Fashinza’s total raised to $ 135 million, which Gupta says is used to refine the company’s supply chain technology and expand into new markets, including procurement of raw materials.
“Business-to-business markets are here to stay. We can’t imagine a world where, even in 2030, brands would need to make 100 calls, send 200 emails and wait six months for [a] bulk order, “Gupta said.” The whole experience is cut off and it doesn’t work in this fast-paced world. But the solutions … have to be vertical and very customized for … the industries. “
An expanding market
Before starting 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 a workforce of 200. Gupta expects the headcount to increase to 250 by the end of the year.
Fashinza makes money by charging suppliers a “usage-based” fee on each order and by providing value-added services such as logistics, fintech and business-to-business payments to brands and manufacturers. Gupta claims that Fashinza is able to achieve cost savings improve unit economics on the supply side by exploiting “spare capacity” and “improving production efficiency” through technology and data.
Of course, 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 e-commerce retailers a Amazon-like supply chain technology, while ShelfLife offers a market for commodity suppliers based on what brands actually need. There are also sustainable sourcing platforms like Sourceful, which sit somewhere alongside financial supply chain platforms, including Tradeshift.
Gupta supports it Fashinza’s focus on the fashion industry differentiates it sufficiently, indicating 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 to persuade fashion and apparel brands to adopt technologies to modernize legacy processes, including procurement. For example, a 2020 McKinsey study found that while 74% of brands expect the digitization of product development and procurement to accelerate, only 20% plan to make country and supplier selection technology a practice. common.
But Gupta believes it Fashinza has the things – and the funding – to be successful. Indeed, the startup will benefit from the continued investment boom in the supply chain management market, which has seen a $ 11.3 billion injection from venture capital firms last year.
“The solution proposed by Fashinza is essentially based on technology, which distinguishes us from our competitors. Imagine the disruptions caused by Uber and Amazon in their respective sectors. Fashinza is doing something similar in the business-to-business apparel manufacturing industry, “Gupta said.”End-to-end production can be managed through the Fashinza platform with … transparency and control, without the need for sourcing managers to leave their offices, without the need to depend on multiple intermediaries and without the possibility of unexpected delays “.