Fashion startup Newme raises $18M in Series A

The round also saw participation from existing investors including Fireside Ventures and AUM Ventures

Newme will use the funds primarily in three areas: strengthening its supply chain, investing in data science and technology, and its offline expansion.

The startup launches 500 new styles every week and offers nearly 9,000 styles online on the website targeting Gen Z female shoppers.

Newme, a Gen Z-focused fashion startup, has raised $18 million in its Series A funding round led by venture capital firm Accel. The round also saw participation from existing investors including Fireside Ventures and AUM Ventures.

The Bengaluru-based startup plans to use the funds primarily in three areas: strengthening its supply chain, investing in data science and technology, and offline expansion, Newme co-founder and CEO Sumit Jasoria told Inc42.

Supply chain innovation is critical to our business. Another crucial area is technology and data science, where we are looking to deepen our expertise and attract more talent, Jasoria said.

The startup will also use some of the newly raised capital for talent acquisition, he added.

Launched in 2022 by Jasoria, along with Vinod Naik, Shivam Tripathi and Himanshu Chaudhary, Newme sells women’s clothing. The startup claims to launch 500 new designs every week and has nearly 9,000 designs online on the website targeting Gen Z women.

Currently, Newme has six retail stores across five cities: Bengaluru, Hyderabad, Indore, Mumbai and Chandigarh. It plans to open its seventh store in Dehradun soon. By March 2025, the startup plans to open 15 stores across Mumbai, Pune, Delhi NCR and Bengaluru.

“We are seeing tremendous growth and customer enthusiasm for our offline business. Our stores are performing exceptionally well and we are one of the few brands in India to secure ground store locations in malls. This demonstrates the traction we are gaining from our customers. As for the long-term business outlook, we are very excited about our offline expansion journey and believe it will only intensify from here,” Jasoria said.

Meanwhile, the Newme app and website together have around 35-40 lakh registered users. Currently, the startup gets nearly 40-50% of its orders from metros and tier-I cities, with Bangalore and Hyderabad contributing a significant chunk. Tier-I and II cities together account for around 75% of its demand, while the remaining 25% comes from other cities.

Jasoria said the startup has grown nearly 7X in 2023 and is on track to grow 4X to 5X in the current year. He added that the focus continues to be on increasing its market share.

The funding round comes nearly six months after the fashion brand raised $5.4 million in seed funding from Fireside Ventures, AUM Ventures, 2AM Ventures and All In Capital.

The startup is competing in the highly competitive and crowded fast fashion market, which is focused on Gen Z. While leading fashion brands like Myntra and Ajio have introduced Gen Z-focused offerings on their platforms, the global fast fashion giant is also set to return to India in partnership with Reliance Retail.

Commenting on the competition, the founder said that Newmes’ supply chain was its biggest strength. We are perhaps the only brand today that launches 500 new models every week. No other brand does that, and it is a unique advantage that is difficult to replicate because of the complexity of building such an efficient supply chain, Jasoria said.

According to a report by Inc42, the Indian fashion e-commerce sector is expected to grow at a CAGR of 25% to reach a size of $112 billion by 2030. Within this market, the women's apparel and accessories segment is expected to lead the way, capturing a substantial market share of 50% by 2030.