Are You Following Me? 

How Technology is Influencing Fashion Trends

This is a Guest Post from Ben Tompkins, Partner at London Based Eden Ventures. In conjunction with London Fashion Week, Eden Ventures co-sponsored a panel discussion at Forward Internet Group’s office in Camden Town. 

It was great to go along to the Are You Following Me? – How Technology Is Influencing Fashion Trends (#ayfm) event last night – and to have the opportunity to sponsor it alongside Forward Internet. Held in Forward’s offices in Camden Town, the event was hailed as ‘London’s best tech startups meet [at] London Fashion Week’. With over 120 people attending from fashion, technology, social media and publishing, it proved to be an eclectic group of panelists and audience participants with some very specific and forthright views. For me, it was doubly great having been to a social-media-meets-fashion event (Fashion 140) in New York last summer. There is no doubt in my mind that social media is going to make a big impact on the fashion industry, just as digital distribution is fundamentally changing music, TV and games.  What irked me about last year’s event was that it was taking place in New York and not in London.  We may not have come up with Facebook or Twitter (or Google, Amazon, and eBay for that matter). But, surely London can do fashion?  After all, we have Net-a-Porter and ASOS. Vivienne Westwood, Alice Temperley and Stella McCartney.  And, yes, TopShop and Burberry. Surely, we are not going to leave all the exciting new tech developments in fashion to the Americans?

So it was reassuring to see a group of international entrepreneurs present and debate some truly interesting opinions and insights on this subject during London Fashion Week (#lfw). The first panel (Christine de Leon from VeryNiceThreads, James Joseph from Stylenoir, Ryan Barkataki from Closetswap and Katie Smith from EDITD) focused on curation, discovery and user generated content. Previously, the heartland of the Elle’s and Vogue’s of the world, this was all about real time feedback (no need to wait until the next issue), having an opinion, crowdsourcing, the ‘power of pull’ and data empowering better decision making.

Christine had some interesting comments on the power of street fashion in trend setting. There was a bit of a tussle in the audience when James commented that too many software engineers didn’t make for a great user experience. But no one was hurt. I always thought that rule #1 of development effectiveness was [to] cut the tech team in half!

Another interesting comment was on the use of data to make better decisions (led by EDITD). This prompted a discussion around the concept that ‘fashion is art’ and that data didn’t have a place. It struck me that, for the truly creative 0.1% of people in the industry, this is probably true. However, for the rest of us trying to make money from their creative genius, data is pretty essential.

The second panel was a little grittier and was called Platforms, which, being a bit thick, took me a little while to realise meant ecommerce. Here, Dean Fankhouser from Nuji, Felix Leuschner from Stylistpick, Andreas Klinger from Lookk (Disclosure: one of Eden’s portfolio companies) and Nicola McClafferty from Covetique explained how their businesses aim to monetise social media activity around likes, sharing, following and recommending.  The topics were around traffic acquisition, conversion and KPIs [key performance indicators]– how to make money from all the likes, followers, nudges, etc.

This discussion struck me as being a little more informed than what I had heard in New York last year. Maybe the eight months has made a difference (we now have Fab and Pinterest to point to, for example). Or maybe it’s that, given the relative scarcity of investment in European tech, the startups here have to worry about revenue just that little bit sooner.   For good or bad?

That said, a good number of the participants (both panelists and in the audience) had already raised some funding and a number of VCs were in the audience, notably Balderton [Capital] and Venrex [Investment Management]. It was good to see many Seedcamp companies present – EDITD, Lookk and Nuji (Disclosure: Eden is an investor in Seedcamp).

Perhaps the most interesting element was the audience participation, and the lack of it. The whole ‘fishbowl panel’ concept was a bit difficult for most of us to grasp. Nobody wanted to ‘get in the fishbowl’ but this did not hold back the questions. Notable input came from Metail, Brandid (‘we are clothes, not fashion’, an important distinction) and WishWantWear. My own personal favourite was having my VC investor ignorance corrected – yes, apparently even Vivienne Westwood uses excess channels to dispose of her remnant stock!

The ’lack of audience participation’ prize goes to some well-known brands – including publishers and online retailers – who kept quiet for the most part, clearly not wanting to take the startups’ thunder (or too busy writing notes?).

Hats off to organiser Janita Han (@oomoo).  Looking forward to the next one.

Watch out New York!  The Europeans are coming.

Ben Tompkins (@b_tompkins) is a partner at Eden Ventures (@edenventures), one of Europe’s leading early stage technology investors.

13 years, $75 million, 25 companies. The figures say it all – Brazil has piqued the interest of Intel Capital. The global investment division of Intel that invests in worthy companies worldwide has undoubtedly deemed up-and-coming companies Brazil has to offer, worthy. Within the past year, Intel Capital has invested in five Brazilian companies and doubled its investment team in the region. Of the five companies invested in within the past year, two are quite recent. Intel has intensified its presence in Brazil through investments in fashion e-commerce websites Coquelux and Fashion.me.

“The investments in social commerce site Fashion.me and e-commerce site Coquelux build out critical components of the online shopping ecosystem, offering consumers and fashion brands opportunities to create customized online experiences tailored specifically to interests, needs and cultural preferences,” explained Arvind Sodhani, president of Intel Capital and executive vice-president for Intel.

Coquelux is geared for premium and luxury markets. It is an online shopping club that offers products from a wide array of categories including apparel, technology, entertainment, cooking, beauty, and home decorations. Going beyond simply offering members discounts on products (which range from 30% – 90% off), Coquelux truly serves its privileged clientele to the fullest by acting as a private shopper. The website carefully selects labels and products that cater to the users’ lifestyle. Altogether, a unique shopping experience is created, and tailored to the members’ preferences.

Combining everything consumers look for today, from a social component to customized options, Fashion.me has redefined the way fashion can be interacted with on the Internet. It is a social e-commerce platform that allows members to discover, discuss, share, and recommend items with other members who share a common enthrallment with fashion. There are products offered from over two million popular labels and designers that members can choose from to create customized looks.

The investments indicate not only a strong interest in markets outside of the United States and Europe, but also a growing trend of fashion e-commerce popularity. With players in the investing game as big as Intel Capital making moves, similar investments are sure to be coming up in the near future.

by Sadaf Syed

Private Equity fund L Capital Asia, which is backed by French luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton SA, has recently acquired a 10% stake in Chinese fashion company, Trendy, for a reported $200M, while in India the firm acquired an 8% stake in clothing, fabric, and furnishing company, Fabindia for an undisclosed amount.

Last year, L Capital Asia launched a $640 million fund focused on promising economies including China and India. While yesterday Reuters reported the firm may be raising a $1 billion fund to funnel into rising fashion companies in these BRIC countries. Ravi Thakran, managing partner of L Capital Asia, explains the opportunity is too great to miss. “The reason we want to do a larger fund next time is primarily because opportunities in the segment are huge, and we see larger and larger companies coming to us.”

Trendy, comprised of four labels, own 300 stores in China and franchise several hundred more. The largest label, Ochirly, might be compared to Zara in the US as it appeals toward young, fashion-oriented women with its “internationally inspired designs for its casual wear.” Experts on the matter claim that Chinese brands define native fashions before Western styles enter the atmosphere. Additionally, local businesses have time-honored distribution chains and solid footing with customers. Huang Hanji, a managing director at L Capital Asia, said that the partnership with LVMH would facilitate Trendy’s image development across the portfolio of brands.

The deal for Fabindia was finalized this week with L Capital acquiring the stake from the New York-based venture fund of former World Bank President James Wolfensohn, Wolfensohn Capital Partners, who bought the stake in 2007 for about $10 million. No amounts for the deal were disclosed while those involved say plans for the funding focus on expansion for Fabindia.

Thakran elaborates on the firm’s focus on the retail sector as well as liquor. He says that many plans are already in the works for this year and that L Capital Asia intends to focus on the “Hot Sectors” in Asia and India. With U.S. and European economies in a slump, these markets hold strong promise in their wealth and discerning tastes. Trends indicate that young people in China are spending more than ever on wardrobes and this is backed by sales figures. In 2011, fashion sales soared to 460 billion yuan, or roughly $73 billion, up 15% from a year earlier, and are estimated to exceed 800 billion yuan by 2015, according to Boston Consulting Group. Additionally, experts expect China to make up 30% of the fashion sector’s growth within five years.

by Natalia Ignaczak

Russian-based online shoe retailer, often compared to Zappos, Sapato.ru has just been acquired by OZON, better known as the ‘Amazon’ of Russia. In a press release issued on February 15, early Sapato.ru investor Fast Lane Ventures confirmed the acquisition, although the financial terms were not disclosed. The acquisition had been rumored to occur since e-commerce giant OZON received approval for the deal by the Federal Antimonopoly Service (FAS) of the Russian Federation. After raising $100 million last September, OZON undoubtedly has the assets to afford one of the largest e-shops in Russia. 

Back in June 2011, Sapato.ru received $12 million in funding, led by Intel Capital. The company which only launched about 18 months ago by FashLane Ventures, a Moscow-based Internet business incubator and investor, is experiencing great turn around. Welcoming 2.5 million visitors per month and currently offering more than 90,000 pairs of women’s, men’s and children’s shoes and bags from more than 200 brands, Sapato.ru is filling the void that once existed in the Russian e-commerce shoe market. 

However, this deal marks Fast Lane Ventures’ first exit from Sapatos.ru. OZON’s acquisition of Sapato.ru resembles Amazon’s of Zappos back in 2009. OZON, founded in 1998, too, sells books, DVDs, music, games, antiques, tickets and other goods online. This sale demonstrates the need for OZON and Sapato.ru to merge their divergent markets to accommodate the upward trend of Russians shopping online.

Fast Lane Ventures CEO, Marina Treshchova commented, “Today’s sale of Sapato.ru has further significance as it is the first sale in the Russian e-commerce market in the last 12 months and provides immediate validation of our strategy and commitment to developing quality online businesses in Russia. We hope to repeat the success marked by today’s milestone right across our portfolio.”

People’s Liberation Inc. recently announced some momentous changes the company will be undertaking. Key to this revamp is the $14.5 million in investments by Tengram Capital Partners. Tengram has already purchased $3 million of convertible debentures and has agreed to purchase an additional amount of at least $11 million of debentures within the next few weeks. The funds will not be going towards the projects the company currently has, rather a large majority of the $14.5M will be used for the new business model that will transform their objectives, offerings, and customer base.

The soon to be former People’s Liberation Inc. owns, promotes, and licenses a portfolio of consumer brands, which presently include William Rast and People’s Liberation. A combination of brand management, design, and marketing teams led to the strengthening and growth of the brands owned by the company, who license them to retailers, wholesalers, and distributors.

The new goal is to diversify and expand. True opposers to a half-hearted change, the company is starting fresh with a new name. The transformation from People’s Liberation Inc. to Sequential Brands Group Inc. signifies the move from a “traditional operating apparel company to a brand management and licensing business”. Furthermore, Sequential Brands Group Inc. will take the former People’s Liberation beyond apparel to a wide range of products that spans from furniture to food. “Our new corporate name, Sequential Brands Group, symbolizes our primary goal of owning a sequence of strong, well diversified brands across multiple consumer segments including apparel, home furnishing, sporting goods, electronics, packaged goods, food, and beverage,” remarked Colin Dyne, CEO of People’s Liberation.

Not satisfied by the number of changes the company has undertaken? Here are a few more. William Sweedler is the new Chairman of the Board. He is also the Co-Founder and Managing Partner of Tengram Capital Partners. Invested in the enterprise in more than one way, Mr. Sweedler enthusiastically commented, “Sequential Brands Group will add value to its brands and network through the team’s combined expertise in marketing, merchandising, and brand building. Tengram and our investors are excited to be a part of building this public platform.” Matthew Eby and Richard Gersten, both from Tengram as well, will also be added to the Board of Directors.

Confident and bold, People’s Liberation is taking strides towards what they deem to be a profitable venture. Clearly, they are not alone in this belief, as the $14.5M they raised will work to establish them as Sequential Brands Group, a company we can be sure will do nothing but attempt to champion its way to the forefront of its arena.

by Sadaf Syed

Have you ever seen an item in a store and automatically assigned a “probable value” to it before checking its price? Have you then been terrified or pleasantly surprised by its actual cost? SneakPeeq aims to create that exact scenario online. The social shopping platform encourages shoppers to select items based on their aesthetic rather than a value proposition and then allows them to “peeq” at the price. Most items are discounted about 10-15% to begin with and depending on the actions shoppers take, such as sharing with Facebook friends, they receive deeper discounts. When users first view an item, they can choose to “peeq” at its price. The immediate incentive is that as each subsequent user peeqs the price, it continues to decrease until someone buys the item. At that point, the price resets to its original. Just as a traditional flash sale model, sales are live for a limited time only, but SneakPeeq offers well known designers such as Puma and Kate Spade, which are typically only available for such prices at outlet sources and at a much later time. The social media aspect inspires quicker purchases and more word-of-mouth advertising. Furthermore, users earn “badges” which act as coupons toward future purchases with each way they share the information. No word on just how low the price can get but users are not complaining.

Since its May 2011 launch, the company has swiveled to encourage browsers to take action with each purchase by promoting it via Facebook and other social media outlets. Customers can earn badges redeemable for discounts to further their shopping and immediately lower prices. Each peeq and purchase also contributes to a user’s profile, which can later be aligned to those with similar interests and tastes.

The firm recently announced its funding raise of $2.7M from Bain Capital Ventures, Metamorphic Ventures, Keith Rabois, Tim Kendall, Mike Murphy and Vikas Gupta.

The idea to actually lower prices is a very smart way to motivate customers. No amount of fake points will actually catalyze a purchase but an immediate drop in price will sway customers. Furthermore, the Facebook integration will not only get friends talking but inspire the many hundreds of people who can see each individual’s newsfeed regardless of how often they actually interact. That is an important advantage for SneakPeeq and they are clever to take advantage of it.

 by Natalia Ignaczak

The extraordinary growth of Fab.com to its current 2M member standing in just 8 months, and estimated $200M valuation, is perpetuated today with the addition of vertical shops. The insatiable urge to please its customers is the catalyst for this next project set to launch each day this week. Fab’s team comments, “Fab is pleased to continue to reinvent online shopping by featuring revolving, themed, unique shopping experiences from emerging designers at up to 70% off.”  The categories of shops include Fashion, Vintage, Kids, Pets, and Food. Fab’s buying team, headed by co-founder and CCO Bradford Shellhammer, will travel the world over in search of unique and quality fashion pieces for their discerning consumers. The Fashion shop’s buying team will include the co-founders of Fab’s recent acquisition, FashionStake, Vivian Wen and Daniel Gulati. It promises to offer men’s and women’s apparel alongside accessories, jewelry, bags and fashion-related items.

The progress since the company’s June 2011 pivot and re-launch is unheard of and it is because of their undying need to please that the firm not only gains new members, but actually converts site visits to purchases and return customers. The innovation and newness of daily offerings keeps customers curious and the addition of vertical shops will only encourage longer browsing sessions and more frequent site visits. Fab is now expanding and touching other markets by addressing the needs of these new sectors. Now, not only will those with an interest in home design shop their sales, but also a businessman in need of a tie, or a young woman who loves vintage jewelry will have an interest in the offering. Fab.com remains true to their core beliefs by promising, “Exceptional customer experience is our most valuable design.” It shows not only in personal experience but customer referrals and constant sustained growth.

by Natalia Ignaczak

When it comes to fashion, honest feedback is a huge asset to any trend or outfit. Thre.ad, a New York based social networking site and app, allows users to share their unique style and receive feedback. By sharing their fashion through a “thread” of photos, users can tag photos with brands and styles so that they become a part of another “thread.” CEO Mimi Nguyen describes the site as, “If Twitter and Instagram had a baby, it would be thre.ad!” Still in private beta mode, the startup is raising a $760,000 debt round disclosed in a recent Form D filing. In November, the social networking company raised $450,000 from three investors out of a $500,000 debt round.  However, due to higher demand, the new filing had been amended to include  $560,000 raised from five investors toward a $760,000 round.

Along with Nguyen, thre.ad was also founded by the company’s CTO, Jonathan Rainey, and Fashion Director, Kristin Ming. By being able to spot style, photograph it, and upload the photo from the iPhone app, users have been exploiting street style from all over.  The site and app that is still private membership only can be joined by requesting an invite or being invited from a current user.

by Samara Freschman

Heverest.ru carries more than 6,000 items from over 150 major international sporting good brands such as Nike, Adidas and Speedo. Shoppers have certainly taken notice as the site averages over 600,000 monthly unique visitors. The firm recently announced its addition of $4.3M in funding from one of Russia’s most significant investment funds, eVenture Capital Partners. This brings the funding total to $6.7M. Moving forward, CEO Vladimir Kim intends to extend the online product offering and develop the firm’s CRM system. Funding will also be allocated toward marketing. Earlier rounds included participation from Fast Lane Ventures.

 by Natalia Ignaczak

StyleHaul, Inc. is a pioneer in the cross-section of Youtube and retailers as a platform for direct communication with consumers. The popular channel includes content from fashion and beauty “gurus” who upload videos detailing their latest shopping successes, outfit combinations or DIY projects. The channel has grown at a staggering rate since its February 2011 launch and now boasts 25 million unique monthly views and 14 million network subscribers. 

The brainchild of President and CEO Stephanie Horbaczewski, StyleHaul has built a virtual community of fashion enthusiasts with forward-thinking ideas. Horboaczewksi told FashInvest via email, “We have a team of community recruiters who look at channel recommendations from our existing community and search for producers who have engaging personalities and whose videos are creative.” This leads to a connected community where user input is taken seriously and creativity plays an important role in the viewer experience. There is no requirement for content uploads or the inclusion of particular retailers but instead contributors are asked to maintain authenticity in their postings as each personality plays an integral role in the content.

The involvement of RezVen Partners advances the movement to expand internationally. The group behind RezVen has experience in companies within the digital space including Green Dot, Hachette Filipacchi Media, Hulu, LuLuLemon, Juvo Capital, Machinima, MeziMedia, Overture, PriceGrabber, Saks Fifth Avenue, Siemer Ventures, Yahoo! and others. Of plans for expansion Ms. Horbaczewski explains, “We are looking forward to furthering the expansion of our global community and extending the reach of our original content.”

A channel like this holds infinite potential and certainly much opportunity in a global arena. With more and more people opting to watch web series and their favorite television shows online in an effort to avoid commercials and schedule constraints, all indicators point to continued growth.  It is a critical time, however, for StyleHaul to explore and research international attitudes and cultural differences that divide nations’ outlooks on the importance of fashion and differences in spending habits. Also, many of the retailers and items highlighted tend to overlap among popular contributors. In the interest of viewers from different backgrounds and preferences, StyleHaul should incorporate content from contributors with distinctly alternative personal style and regional ethnicity.

by Natalia Ignaczak