Fashion start-up Virgio, co-founded by Amar Nagaram, former chief executive of Myntra, has raised $37 million in a new funding round as the young company seeks to create “a global fashion brand” from of the South Asian market.
Prosus Ventures, Alpha Wave and Accel co-led Virgio’s Series A funding, valuing the one-year startup at $161 million (post-money). (Virgio says it was founded this year, but did not disclose its seed funding cycle.)
Virgio says consumers’ fashion preferences are changing rapidly and they are unhappy with incumbents’ offerings. It attempts to solve this problem by streamlining the design, manufacturing and purchasing processes in “real time”, giving Gen Z and late Millennials a platform where they can discover and buy the new trendy clothing.
Virgio offers a wide range of casual, party and ethnic clothing. Every week it adds new selections and customers get deep discounts and free shipping.
The startup’s approach has prompted some to compare its model with that of the juggernaut Shein.
“Traditionally, the fashion industry has operated on models of depth and discount,” Nagaram, founder and chief executive of Virgio, said in a statement.
“At the heart of Virgio is the technology foundation, which always listens to changing trends on social media platforms and predicts demand for each trend. This is then integrated into our agile supply chain and responsive to enable the trendiest, stylish yet affordable line in near real time.Thus, Virgio is pioneering the method of testing and scaling, making runway fashion accessible and affordable for all consumers, while eliminating excess inventory for manufacturers,” said Nagaram, a Flipkart veteran who took over Myntra’s top job in 2019 before leaving the company last year.
The startup says its full-stack approach allows it to condense the typical delivery time of eight to ten months down to just one month. His eponymous app has already amassed more than 100,000 downloads, he said. (On Sensor Tower, the app reflects very few metrics because it’s still too small.)
“There is currently a large underserved market for designer clothes in India. For example, for women, only ~25% of fashion is designer clothes. So the fashion industry in India is at a point of inflection, driven by changing consumer preferences due to the influence of social media, an important characteristic of Gen Z to individualize as a form of expression, and the integration of social commerce with platforms of social media,” Ashutosh Sharma, head of India investments at Prosus Ventures, said in a statement.
“We are confident in Virgio’s technology model and believe the startup’s expert founding team is uniquely positioned to seize a great opportunity in India’s fashion industry,” he added.
Dozens of other entrepreneurs – including Mukesh Bansal, Kunal Shah, Binny Bansal, Bhavesh Agarwal, Vidit Aatrey, Saif Ali Khan, Sriharsha Majety and Sameer Nigam – have also invested in the cycle.