Accel, an early investor in Indian e-commerce giants Flipkart and Myntra, is preparing a new fashion e-commerce bet 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 into Newme, an Indian fast-fashion e-commerce startup, according to four people familiar with the matter. The proposed funding would value Newme, dubbed “Shein for India” by some backers, at around $83-85 million post-money, one of the sources said.
The potential new backing comes just a week after Newme announced it had raised $5.4 million in seed funding led by Fireside Ventures.
Newme sells its own rapidly-changing clothing lines online and through offline channels, targeting India’s Gen Z consumers with average order values between $18-30. The startup, founded in 2022, claims to have served 350,000 customers and offer 500 new designs weekly at an average price point of $10.
Accel’s interest comes after it previously backed Virgio, another Indian online fashion retailer later pivoted.
The fast-fashion e-commerce space has gained ground in India recently as local startups take inspiration from global fast-fashion pioneers Zara, H&M and Uniqlo. Top player Flipkart leads the category but faces mounting 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 up its fast-fashion operation, according to job postings.
Shein, which was earlier banned by India, is set for a comeback with a joint venture with Reliance, the two firms said last year.
Accel and Newme didn’t respond to a request for comment.