House of Rare, a Bengaluru-based fashion brand which operates popular fashion label Rare Rabbit, has nearly doubled its net profit in the financial year ending on March 31, 2023.
The bootstrapped startup has reported a profit of INR 32.2 Cr for FY23, marking an 84% year-on-year increase from INR 17.5 Cr, driven by a rise in sales.
In FY23, the startup saw a 77% year-on-year increase in revenue from operations, soaring to INR 376 Cr from INR 212.5 Cr.
The apparel startup generates its revenue primarily by selling clothing and footwear through its retail outlets, a proprietary e-commerce platform, and online marketplaces.
Taking into account other sources of income, House of Rare’s total income reached INR 381 Cr, marking a 74% increase from INR 219 Cr.
Continue Exploring: Tata Capital eyes $300 Million stake in luxury fashion label Rare Rabbit
In the financial year 2022-23 (FY23), the startup’s total expenditure amounted to INR 338.7 Cr, representing a 72% increase from INR 196.6 Cr.
As an apparel brand, the startup’s primary expenditure was the procurement cost of raw materials. In FY23, the startup allocated INR 136 Cr for this purpose, marking a 77% increase from the INR 76.9 Cr spent in the previous fiscal year.
Nearly 20% of the startup’s total expenses went towards advertising. In FY23, advertising costs surged to INR 63.3 Cr, reflecting a 51% increase from INR 42 Cr.
In FY23, the startup directed INR 39.5 Cr towards employee expenses, marking a 54% increase compared to the previous fiscal year. This encompasses various costs such as salaries, PF contributions, gratuity, ESOP expenses, and other related outlays. The uptick in this spending signifies a growth in the workforce size.
The startup recorded an EBITDA of INR 56.2 Cr in FY23, leading to a 14.9% EBITDA margin, indicating a slight improvement from the 14.4% reported in the previous year.
Established in 2015 by Manish Poddar and Akshika Poddar, The House of Rare manages Rare Rabbit, the women’s fashion wear brand Rareism, and the everyday wear brand Articale.
Interestingly, the startup is reportedly in discussions to secure its first funding round of approximately $60 Mn. A91 Partners is expected to lead the funding, with additional participation anticipated from the family offices of Ravi Modi, the owner of Manyavar, and Nikhil Kamath.
Continue Exploring: Rare Rabbit’s INR 500 Cr funding round may see participation from Nikhil Kamath, Manyavar Family Office alongside A91 Partners
The upcoming funding round is anticipated to primarily involve capital infusion, with a secondary sale expected from the husband-wife founder duo. This funding round is projected to value the startup at approximately $266 Mn.
The startup is said to have generated a revenue of INR 600 Cr in FY24. However, these FY24 figures remain unverified as the startup has yet to file its audited financial statements.
House Of Rare competes with contemporary D2C fashion brands such as Bombay Shirt Company, Snitch, Damensch, The Souled Store, and others.