Rare Rabbit, a new-age men’s apparel and fashion label, is finalizing its inaugural institutional funding cycle of INR 500 crore, spearheaded by investment powerhouse A91 Partners, according to sources familiar with the matter.
The fundraising effort is anticipated to involve contributions from the family office of Ravi Modi, the visionary behind Vedant Fashions, which operates the ethnic fashion label Manyavar, as well as Nikhil Kamath, the co-founder of Zerodha. Together, they are expected to invest approximately INR 150 crore.
A91 is anticipated to inject the remaining INR 350 crore into the funding round.
According to insiders, the deal will involve approximately INR 250 crore of primary capital infusion into the company, while the remainder will constitute a secondary share sale by Akshika and Manish Poddar, the husband-wife duo.
Continue Exploring: High-end fashion label Rare Rabbit set to secure $50 Million funding from A91 Partners
These individuals stated that Rare Rabbit is valued at INR 2,200 crore. Having been bootstrapped until now, the brand stands out as one of the most prominent direct-to-consumer (D2C) brands to emerge in the fashion sector.
Attempts to reach out to Poddar, Kamath, and A91 Partners yielded no response. Siddhartha Saraf, the chief investment officer of Manyavar’s family office, declined to provide any comments.
As per information from one of the aforementioned sources, Rare Rabbit recorded revenues exceeding INR 600 crore in fiscal year 2024, accompanied by an operating profit surpassing INR 100 crore. This top-line figure signifies a growth of over 60% year-on-year for the company, which had reported operating revenues of INR 376 crore in FY23.
According to documents obtained from the Registrar of Companies, the company declared a net profit of INR 32 crore for the fiscal year 2023. However, its financials for FY24 have not been filed yet.
According to industry executives, the trend towards premiumization has significantly fueled growth in the men’s fashion sector over the past 18-24 months. Beyond formal attire, casual shirts, denim, and trousers within the premium segment have experienced noteworthy growth, as reported by insiders.
“Numerous premium brands have surpassed the INR 1,000-2,000 crore revenue threshold as apparel premiumization continues to accelerate… In a year such as FY24, characterized by slower growth for many brands, the premium segment has exhibited rapid expansion,” remarked an investor in the segment.
Established in 2015, Rare Rabbit operates under the umbrella of Radhamani Textiles, headquartered in Bengaluru. The House of Rare encompasses the premium women’s fashion label Rareism, the everyday wear brand Articale, and the flagship Rare Rabbit.
Previously, Radhamani Textiles primarily operated as an apparel manufacturer, with a strong emphasis on catering to export markets. The company supplied fashion products to prominent brands, including global giants like Inditex, the European fast fashion conglomerate behind Zara.
Continue Exploring: Tata Capital eyes $300 Million stake in luxury fashion label Rare Rabbit
“A majority of companies typically prioritize either manufacturing or building a successful brand… This stands out as a ‘rare’ instance of a company excelling at both,” commented a senior fashion industry executive based in Gurugram.
Manish serves as the creative director for Rare Rabbit, while Akshika oversees the management of the Rareism label.
The omnichannel men’s fashion brand presently runs approximately 135 physical stores and has ambitious expansion plans following its initial funding round.
“Approximately two-thirds of the company’s business originates from the offline channel… Following the funding, there are expectations for a rapid expansion of the store network within a short timeframe,” stated a knowledgeable source.
Several of these stores are located in tier-II and tier-III cities such as Ahmedabad, Bhopal, Dehradun, Ranchi, Guwahati, and Vijayawada, alongside major metro cities like Delhi, Bengaluru, Mumbai, Hyderabad, and Chennai.
Annually, the Louis Philippe brand under Aditya Birla Fashion & Retail Ltd generates approximately INR 2,500 crore in revenue, while the American fashion label Tommy Hilfiger, managed in India by Arvind Ltd, is a brand valued at INR 1,000-1,200 crore.
In fiscal year 2023, Marks and Spencer, the British fashion label operated by Reliance Retail in India, reported operating revenue exceeding INR 1,600 crore, with earnings before interest, taxes, depreciation, and amortization (EBITDA) surpassing INR 300 crore.
“In FY24, growth has decelerated for numerous brands… Rare’s growth in such a period underscores some significant trends in the industry,” remarked one of the individuals.
During the initial nine months of FY24, Aditya Birla Fashion’s lifestyle business segment, comprising premium fashion brands such as Louis Philippe, Allen Solly, Van Heusen, and Simon Carter, disclosed revenue of INR 4,995 crore, marking a 2% decline compared to the corresponding period in FY23.
On April 26, it was reported that former Zomato top executive Mohit Gupta and Myntra cofounder Mukesh Bansal secured $26 million in seed funding for their premium women’s fashion startup Lyskraft. This funding round stood out as one of the largest early-stage investments for an Indian startup amidst the prevailing funding constraints.
In February, Bombay Shirt Company, a men’s clothing brand with a 12-year history, concluded a funding round worth INR 54 crore, spearheaded by Singularity Growth with involvement from CaratLane founder Mithun Sacheti. This funding round encompassed both primary and secondary transactions. The company had announced plans to utilize the fresh capital for expanding its store network.
Continue Exploring: Amazon surpasses rivals as Gen Z’s top fashion destination in India, survey finds
