Backed by corporate venture builder, Fatfish Internet Group, the company intends to position itself as a corporate venture platform with an aggressive acquisition strategy for Southeast Asian fashion startups.
A similar business would be South Korean roll-up play Yello Mobile. The roll-up technique, typically in private equity, is where multiple small companies in the same market are acquired and merged, with the aim to reduce costs through economies of scale.
The consolidation will likely increase the valuation multiples the business can command as it acquires greater scale, and rationalise competition in a fragmented industry.
Fatfish chief executive officer Lau Kin Wai told DEALSTREETASIA that the firm has “invested in substantial effort, people cost and resources” in the eight months leading to this funding announcement.
“We have invested significant undisclosed amount and are a major shareholder of iFashion Group, as a corporate founder. What we have done is not just fee based work for iFashion,” he commented.
As more Asian shoppers go online for their fashion purchases, iFashion Group is looking to achieve rapid growth through collaboration, co-existence and synergistic resource-sharing in the online fashion and lifestyle industry, it said in a statement.
“However, this industry is highly fragmented and many brands operate small teams with limited resources. iFashion Group aims to become the region’s fashion hub for this thriving community, delivering a range of B2B and mentorship services from logistics, warehousing, production, financial services to sales fulfillment,” it said.
The company is targeting startups that are three to five years old with proven market traction and growth potential.
The startups on iFashion’s venture platform can tap onto the synergistic resource-sharing, as well as the marketing know-how and resources to grow their brands.
“As e-commerce volume and traffic increases, these brands will enjoy the various business services and market knowledge provided by iFashion to effectively manage their growth,” Jeneen Goh, iFashion Group managing director, said.
iFashion Group is the first in Singapore to create such a B2B venture platform for the online fashion industry.