Accel, an early investor in Indian e-commerce giants Flipkart and Myntra, is gearing up for a new bet on fashion e-commerce in India even as competition intensifies with the recent expansion of Mukesh Ambani’s Ajio platform.
Accel is in advanced talks to lead a $15-20 million funding round for Newme, an Indian fast-fashion e-commerce startup, according to four people familiar with the matter. The proposed financing would value NEOMI, which some backers call “Chain for India,” at about $83 million to $85 million after discounting, one of the sources said.
The potential new backing comes just one week after Newme announced it had raised $5.4 million in seed funding led by Fireside Ventures.
Newme sells its fast-changing clothing lines online and through offline channels, targeting Gen Z consumers in India with average order values of $18-$30. The startup, founded in 2022, claims to have served 350,000 customers and offers 500 new designs weekly at an average price of $10.
Accel’s interest comes after it previously backed Virgio, another Indian online fashion retailer, which it later pivoted.
The fast fashion e-commerce space has been gaining popularity in India recently, with local startups taking inspiration from global fast fashion leaders Zara, H&M and Uniqlo. Top player Flipkart leads the category but faces increasing competition from Ambani’s Ajio, which has amassed about 30% market share, according to research firm Bernstein. E-commerce rival Amazon is also looking to build out its fast-fashion operations, according to job postings.
Shein, which was earlier banned by India, is set to make a comeback through a joint venture with Reliance, the companies said last year.
Accel and Newme did not respond to a request for comment.