Delhi-based fashion house, High Street Essentials (HSE), the parent company behind women’s fashion brands, FabAlley and Indya, has raised Rs 8 Cr in venture debt from Trifecta Capital, marking the venture capital fund’s second round of debt infusion into the company. HSE had raised its first venture debt round of Rs 5 Cr from Trifecta Capital in January 2018. The latest infusion of capital comes shortly after the company raised Rs 60 Cr in Series B funding from SAIF Partners in December 2018.
HSE was started in 2012 by Shivani Poddar and Tanvi Malik, with womens’ western wear brand, FabAlley. In 2016 they launched, Indya, an ethnic-fusion brand, in response to the growing demand for contemporary Indian wear. In October 2019, the company launched its 3rd brand Zyra, in a move to capture the growing fashion jewellery market.
The company has pioneered fast-fashion in the country, and is among the first Indian fashion retailers to have a robust omni-channel retail model. HSE’s brands, FabAlley and Indya, currently retail through their websites, horizontal online market places, large format chains such as Lifestyle and Central, along with more than 30 Exclusive Brand Outlets across the country.
During FY20, HSE has scaled up its retail footprint with 10 new Indya stores and 5 FabAlley stores, along with expanding both brands to over 350 shop-in-shops across the country. The company plans to deploy the fresh round of funding to further fuel the offline expansion of its brands.
The founders, Tanvi Malik and Shivani Poddar, said, “As we scale both our offline and online presence, while incubating new offerings and brands in complementary spaces, it is imperative that we upgrade our infrastructure and working capital simultaneously. In the next 12-18 months, we plan to grow our retail presence by increasing our exclusive brand stores’ count to 50 and doubling our shop-in-shops to more than 650. The capital expenditure required to fund this growth is best done through debt, since it reduces the cost of capital and improves ROE.”
Nilesh Kothari, Co-founder, Trifecta Capital, added “HSE continues to be a rising star in the female fashion segment. Continuing with its omni-channel strategy, the company has doubled-down on the offline segment in the past couple of years. This strategy has reaped rich dividends in the form of stellar growth. They are among those rare start-ups which have remained profitable even while scaling up rapidly. We are excited to continue to be a part of their growth story.”
HSE recently announced its FY19 financial results, reporting a net revenue of Rs 90.2 Cr, with an EBITDA of Rs 3.3 Cr and a PAT of Rs 1.3 Cr. The growth is a result of sustained efforts towards increased distribution, product expansion and strengthening the company’s technology backbone. The company is on track to close FY20 at a growth of 75% over FY19, with EBITDA and PAT-level profitability.