Indian online fashion brand for kids, Hopscotch, has raised USD 25 million in fresh funding from EE Capital, Lionrock Capital, Rise Capital, RPG Ventures, and IIFL Seed Ventures.
Techpro Ventures, the family office of Atul Nishar, founder of Indian IT firm Hexaware, and existing angel investor, Weihua Yan, co-founder of Diapers.com and partner at Rise Capital, also participated in the round, said a report by local media Economic Times (ET).
The Mumbai-based startup also counts, Eduardo Saverin, co-founder and the first investor of Facebook Inc., and Toivo Annus, CTO and co-founder of Skype, as its backers.
Founded in 2012 by Harvard Business School alumni Rahul Anand and Lisa Kennedy, Hopscotch is an internet-first direct to consumer (D2C) clothing brand for kids upto the age of 10. The company also sells food and personal care items for children through third-party firms.
The company claims to have three million monthly active users, with the average order size of INR 1,500. According to Anand, founder and CEO, Hopscotch, in an interview with ET, the company is seeing mothers increasingly spend more to buy branded products for their children.
In fact, the company has switched from losses to EBITDA (earnings before interest, taxation, depreciation, and amortization) profitability, he added.
This comes at a time when vertical e-tailers such as those selling apparels, fashion accessories, cosmetics, and furniture, among others, have been recovering slowly after going through the zero revenue period during the two-month-long lockdown in the second quarter of the year.
The global trend of increasing number of independent brands setting up their own online platform in addition to selling their products on digital marketplaces, is catching up in India. With increased internet penetration and online shopping taking a center stage during the pandemic, D2C brands in India are getting better visibility.
“We launch 400 styles every day, while most brands launch 800 a year,” said Anand. “Every minute, we sell two dresses.”
The company competes with FirstCry, which landed a USD 300 million check from SoftBank in February to become a billion-dollar startup.
Hopscotch said it might start listing its products on major e-commerce platforms. “We have been approached by every horizontal player out there…last few months, we have been piloting with Amazon India and early numbers look good,” Anand said.
In February 2019, the company was in discussions with Amazon and Walmart-owned Flipkart to sell a minority stake to raise up to USD 60 million so as to fund its expansion plans. Although, the talks never materialized into anything substantial.