Direct-to-consumer pop culture apparel startup The Souled Store has raised Rs 135 crore in a funding round led by Xponentia Capital, according to ETtech report.
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. “The second thing we want to do is launch new categories like kids wear; footwear is doing really well.”
He said unlike the industry standard of selling Rs 10,000 to Rs 20,000 worth of products per square foot per year, The Souled Store sells about Rs 70,000 per square foot per year. It currently operates 12 stores across Mumbai, Bengaluru, Gurugram and other cities.
The investment will also be used to offer a buyback of 100% of vested employee stock options, Patel said.
The Souled Store will also expand to more international markets in the next two-three years. 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.
“Kids’ is a natural extension of what we are doing,” he said. “Everything we are doing is relatable to the younger audience. When you are doing kids, it is an older customer base that you have to target. So, now that we are a decently household brand, I think it is the right time to enter the kids’ segment. The offline story will also aid in helping the kids’ category grow as families would be shopping together in malls.”
“Timing is everything,” said Patel. “We started when customer acquisition cost (CAC) was very low. Today, we have cemented ourselves in the consumer’s head as the go-to place, so our CACs are low. Today if you do something similar the CACs will be very high. It would be 10x of what it would be six years ago. We have built a cult-like customer base, and we enjoy the benefits of it…”
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