China’s women’s garment rental startup Yi23 or YCloset (衣二三), announced a new funding round on September 7 which was led by its strategic investor Alibaba (阿里巴巴). The amount of funding was not disclosed immediately.
The proceeds of the round will be used for expanding the company’s development teams, upgrading the recommendation algorithm, and building an intelligent operation centre, news aggregation platform 36kr.com (36氪) reported.
Founded in 2015, Yi23 provides subscription-based apparel renting service for women, especially those between 22 and 35 years of age, in Tier I and II cities in China.
Yi23 founder Liu Mengyuan told 36kr that Alibaba’s participation will bring Xianyu (闲鱼), Taobao (淘宝), Tmall (天猫), Alipay (支付宝), and Sesame Credit (芝麻信用), all Alibaba product lines, into the emerging garment rental business.
“In the future, we will sign a cooperation contract with Xianyu, Taobao, Tmall, Alipay, and Sesame Credit, offering a variety of garment rental and sale services to users,” she added.
Liu believes that user experience is of primary significance for the rental businesses. To improve it, the firm is building an intelligent operation centre to guarantee instant delivery, and upgrading the Radio-frequency identification (RFID) technology with automatic-sorting and item-tracking systems.
The platform offers 500 brands, among which designer brands account for 50%. Entry-level luxury brands such as Acne Studios, Self-Portrait, PINKO, McQ, and VERSACE JEANS, and domestic brands like Peacebird account for 20% and 30% respectively.
Yi23’s members have unlimited access to fashion items in different styles and brands with a monthly fee of CNY 499 (USD 73). They are able to convert some of the rental items into purchases.
Prior to Alibaba’s strategic investment, the company had already completed four rounds of financing from some of the best-known venture firms in China (details in chart below).
According to the Chinese information platform China Money Network (中金投), Yi23’s Series A round was led by GSR Ventures (金沙江创业投资) and angel investor Wang Gang. IDG Capital (IDG资本), Zhen Fund (真格基金) and Crystal Stream (清流资本) joined a Series A+ round.
Chinese investment firm Panlin Capital (磐霖资本) led a USD 20 million Series B round in March 2017, with GSR, IDG and a couple of smaller Chinese funds participating.
In September of the same year, Yi23 announced a USD 50 million Series C round jointly led by Alibaba Innovation Ventures (阿里巴巴创业者基金), Softbank China (软银中国) and Sequoia Capital China (红杉资本). GSR, IDG, Zhen Fund and a number of other Chinese investment firms also participated.