D2C apparel startup The Souled Store raises Rs 135 crore funding led by Xponentia Capital
Summary
Direct-to-consumer pop culture apparel startup The Souled Store has raised Rs 135 crore in a funding round led by Xponentia Capital Existing shareholders Elevation Capital and RPSG Capital , an early-stage consumer VC fund from RP-Sanjiv Goenka group, also participated in the new round.The D2C brand will use the capital to expand its offline stores to more than 100 across the country and invest in newer categories like kids wear and sneakers, cofounder Vedang Patel told ET.One of the reasons we want to raise money is because our offline stores are doing extremely well; they beat industry metrics and we want to really capitalise on that growth lever, he said. Patel said it had started selling in the UAE and was looking to expand to the wider GCC region.Countries in East Asia and Europe were also being considered, he said.The deal comes at a time when late stage D2C brands are finding it difficult to raise funds amid a tough funding environment globally, leading to distress sales in many cases.Goat Brand Labs, backed by Flipkart Ventures and Tiger Global, acquired Chumbak, along with other D2C brands in January in a fire sale. Traditional brick and mortar companies like Unilever , Aditya Birla Group and ITC have also acquired multiple D2C brands like Oziva, Wellbeing Nutrition, Yoga Bar, and Bewakoof, among others.Patel said the company has built in multiple competitive advantages since inception in 2013. For pop culture apparel, several brands have offered The Souled Store better licensing deals, he said. The company pays licensors like Disney, football club and sport franchisors a percentage of the sales.Patel said the companys expansion offline is not a function of the rising costs of advertising on tech platforms like Meta or Alphabet.The Souled Store was able to sell Star Wars and Marvel T-shirts cheaper than offline sellers by capitalising on the low costs of targeted advertising through these platforms six years ago.Patel said the reason why it was expanding into kids wear, a key target group for pop culture-licensed products, is that the company could never target children through online ads.But now that the brand is mature, the company is confident of venturing into the space.Kids is a natural extension of what we are doing," he said.