IndoChino Lands $4 million in venture funding

[loveandhate]

I wasn't sure if this had already been posted. Hope not.

A Round for the e-Tailor

Indochino founders Heikal Gani and Kyle Vucko have seen their technology
and tailoring company grow sales by triple digits and land funding from Madrona Venture Group.



Indochino, a company founded by two twenty-somethings while they were in college to deliver tailored suits to men without the hassle of actually going to a tailor, has attracted the attention"”and money"”of an early backer of Amazon.com.

Madrona Venture Group of Seattle led a funding round of $4 million first round of venture funding for the technology and tailoring company, Indochino announced this morning. Previous angel investor Burda Digital Ventures also participated in the round, showing renewed confidence in the company founded by Kyle Vucko and Heikal Gani.

Vucko, Indochino's CEO, told Portfolio.com much of the money would go to boost the company's Chinese production facilities in Shanghai, as well as to market what he and his venture backers believe is a concept that could change the way men deal with buying their dress clothes.

"We're just excited to see if we throw some money into marketing, where things go," he said.

Vucko's company, started in 2007 when he and Gani, the company's chief creative officer, went shopping for suits while still students. They found the experience miserable. Sales people were snooty. Office-ready dress clothes were out of their price range. And the retail experience was generally set up for, well, women.

"That's when the lightbulb went off," Vucko said.

The two decided to set up a company that would allow men, with the help of a significant other or friend, to send measurements over the Internet and pick from a range of suits, sport coats, and other office apparel. With measurements on screen, Indochino then creates a tailored item of clothing for the buyer.

By cutting out the retail middleman, Indochino is able to keep its inventory to bolts of cloth, and sell higher quality suits for less money than such retailers as, say, Brooks Brothers.

"We kind of take that 50 percent out of the mix," Vucko said. "When we look at competitors we're looking at men's retailers in general."

Then there's the time factor, though that could be matched by others who decide to compete with Indochino online.

"You can order your entire wardrobe from Indochino in the time it takes to drive to the mall," Vucko said.

Since its founding, and initial investment of $800,000, the idea has at least begun to catch on. Indochino, which is based in Vancouver, has 17,000 customers. Most of them are in North America, though the company counts customers in 60 countries. Sales growth was 245 percent from 2009-2010. The company, Vucko said, has passed the seven-figure revenue mark and has positive cash flow.

All that's good. But for now, Indochino is quite a small company, and venture capitalists like Madrona are on the hunt for big scores like Amazon or Nordstrom.com. Scott Jacobson, the Madrona partner who will be joining Indochino's board, said he sees possibilities that Indochino could be one of those big innovators in the growing e-retailing business.

Read more: http://www.portfolio.com/views/blogs...#ixzz1IwmqMcHc

 

[GradSchooler]

I used to keep an eye on these guys out of curiosity and an initial interest in their products (back before it became perfectly clear that they were full of **** about the canvassing and fabric content of their suits). Just took a look at the website, first time in quite a while... gah!

"Every man should start with a black suit. It's the most essential part of the wardrobe."

And the jacket length makes Thom Browne stuff look generous.

 

[ter1413]

a black suit?? wtf!!

 

[lee_44106]

Originally Posted by GradSchooler

I used to keep an eye on these guys out of curiosity and an initial interest in their products (back before it became perfectly clear that they were full of **** about the canvassing and fabric content of their suits). Just took a look at the website, first time in quite a while... gah!

"Every man should start with a black suit. It's the most essential part of the wardrobe."

And the jacket length makes Thom Browne stuff look generous.

YOU and the rest of the SF are the minority.

What is heartily approved and drooled over in WAYWRN is not standard for the rest of the world.

As an example, how many of the suit-made-for-you ventures that started on SF has succeeded?
Steven Avery is a prominent example of failure. I've not heard too much about TaT.

If the goal is to be financially successful, catering to exclusively SF tastes is not the way to go.

 

[GradSchooler]

I understand that those of us who are sartorially educated are in the minority. But that doesn't excuse anyone for perpetuating the notion that a black suit is for everything.

Case-in-point: The very first suit I bought was a black suit. Not because I particularly wanted a black suit, but because I was told (by sales staff) that it was the most "basic" and "versatile." They could just have easily told me that a black suit was for funerals and that I'd be better served with navy or charcoal, if they'd known better.

All I'm saying is, from my experience in mens wear, most guys don't come in for a black suit. They come in for a suit and are misdirected to black. If you're going to sell menswear, at the very least you should know something about it and properly educate your customers instead of lining your pockets with their ignorance. Which, if they ever find out that's what you did, could come back to haunt you.

 

[loveandhate]

Originally Posted by lee_44106

YOU and the rest of the SF are the minority.

What is heartily approved and drooled over in WAYWRN is not standard for the rest of the world.

As an example, how many of the suit-made-for-you ventures that started on SF has succeeded?
Steven Avery is a prominent example of failure. I've not heard too much about TaT.

If the goal is to be financially successful, catering to exclusively SF tastes is not the way to go.

You're absolutely right.

But still... what's the reason to have customers start with a black suit when they could have just as easily said navy or gray? I don't get it. I almost took that as IndoChino giving SF the finger but I'm sure it's not that deep. It'll be interesting to see if things change for the better or worse over this next year due to the injection of cash.

 

[musicguy]

Crazy stuff... Their suits look like **** on nearly everyone unless you're short and skinny. Even then, it's mediocre at best. They have a really simple business model though. I'm surprised other startups haven't tried to do the same thing. I used to keep track of the Indochino thread, but the people who post there the most know nothing about what a good suit is supposed to look like.

 

[IrateCustomer]

Really, they aren't competing against the higher quality retailers or tailors, they are competing with the lower priced OTR stores. Only they are doing it with a MTM twist. Their fabrics are obviously of less quality, and the tailoring follows suit. They are competing with all the other $400 suits out there, and if they sew it correctly the first time around (which I understand doesn't happen with any real consistency) they are providing a better fit than OTR suits. They may not be as fashion forward with shoulder work, or other details, but I think the idea is a very sound one.

If I'm going to spend $400 on a new suit, I'd rather have something made for my body, and not a blanket set of 40R measurements. From what I've read about them, they do provide a very good customer service experience when the suit isn't correct out of the box.

I'm not a fanboy of the company as I haven't personally given them any business, but I've read up on them quite a bit. I like the idea and the business model, and for what your spending I really don't see any OTR stuff that blows it away. This company isn't catering to the sartorial officianado by any stretch of the imagination.

TL;DR
For who they compete with price-wise, I think it's a very good business model with a fit advantage (when done correctly) due to working with the customer's measurements.

 

[gladhands]

IRL, the navy suit is actually bolder than black. I don't notice the countless men in ill-fitting black suits on the street, but the blue suits definitely stand out.

 

[Redwoood]

I agree, their business model is sound for non-SF land, probably unsuitable for SF land.
They know it, too, so if you come off as a very picky customer, there is a good chance they won't invest any more into remakes.

If find their attitude towards truthful representation of their products very lacking to say the least, but not sure how many VC firms actually care about that. If I were funding them, for the next milestone, I'd let them show me 10 suits with properly-fitting shoulders...