LONDON — Amsterdam-based Otrium, an online marketplace for end-of-season fashion, has raised $120 million in a Series C funding round, having tripled its revenues in 2020 and drawn an array of brands to the site, including Karl Lagerfeld, Joseph, Anine Bing and Alexa Chung.
The round was led by Bond and Index Ventures, the latter of which has increased its existing stake in Otrium. Index has backed Asos, Glossier and Farfetch in the past. Eight Road Ventures, which led the company’s $24 million Series B round last May, also participated in the latest fund raise.
“The platform is well positioned to bring dynamic and affordable solutions to the apparel market,” said Juliet de Baubigny, a general partner at Bond who will also be joining the Otrium board.
Companies looking to solve fashion’s inventory issue, across the primary and secondary markets, have been at the top of investors’ agenda in the last year, with Vestiaire Collective receiving investment from Kering and consignment platforms like ThredUp and Poshmark completing successful initial public offerings.
Otrium, whose marketplace model allows brands to launch their own online outlet stores on the platform, will use the funds to accelerate U.S. expansion plans and make more hires. It also plans to develop tech-enabled capabilities that will ultimately help its brand partners manage and reduce unsold inventory.
Some existing features include “expanded analytics,” which will be sent to brand partners to help them analyze past demand, determine which items have lasting power and turn them into carryover stock. Otrium believes that carryover stock will surpass the popularity of new and seasonal items in fashion’s post-pandemic landscape.
“Our goal is to get as close as possible to eradicating unsold seasonal inventory,” said Milan Daniels, Otrium’s chief executive officer and cofounder.
“The fashion world will see a rebalancing in the next few years, with more sales being driven by iconic items that brands sell year after year, and will be less reliant on new seasonal launches. We work with brands to help them understand which of their items will stand the test of time, and at what price and quantity.”
Daniels experienced the problem of unsold seasonal inventory firsthand, having previously launched the direct-to-consumer sweater brand Breaking Rocks. He quickly understood the off-price market was mainly focused on brick-and-mortar retail — meaning the big brands were the only ones that could benefit from it.
He wanted Otrium to offer a digital solution and make end-of-season selling easier for brands of all sizes, with tools such as dynamic pricing, which enables designers to make more precise pricing or merchandising decisions and to sell their past-season inventory faster. The platform sets pricing for products based on variables such as style, number of units and sizes available, and interest from Otrium’s wider community.
With the amount of unsold inventory — usually 12 percent of a collection — doubling during the pandemic, demand for Otrium’s service naturally surged.
But even post-pandemic, the company believes it has a role to play in helping brands make data-based merchandising and design decisions and move away from producing one too many seasonal collections.
“The notion of brands producing fewer new items and focusing more on what their customers love and buy over and over again is powerful. It’s not an entirely new strategy in the fashion industry, but one that was limited to a few items and a small proportion of global fashion brands. With Otrium, every fashion label can begin to build their iconic portfolio,” said board member and Index Ventures’ general partner Danny Rimer.