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Fast style is an manufacture ensnared in labor issues and copyright trouble , and it has an immenseenvironmental impactdue to its wastewater and C discharge . It also happens to have the voltage to make a lot of money , fast .
But despite all these issues , VCs wo n’t stop loving the sector .
On Wednesday , my colleague Manish Singhwrote a scoopabout a potential Accel investment into Newme , a fast - fashion inauguration based in India . Newme is an app - base retailer that produce 500 new item a hebdomad with an mediocre terms tag of $ 10 . This tidings add up just a week after the society closed a ejaculate round .
Accel and Newme did not respond to petition for input .
Newme looks very much like many other VC - backed debauched - mode startups like Shein , which has raised $ 4 billion , and Cider , an Andreessen Horowitz – stake inauguration value at $ 1 billion . cyder says it ’s on - demand inventory makes it a more honourable fast - style option . That ’s up for debate , though .
Accel ’s potential investment into Newme stood out to me for a few reasons , the large of which is that I ’m just not really sure why VCs back these companies .
Fast - fashion companies gained speedy popularity and large followings because of their ability to bring in apparel from the rail to your local department store in record clip . But the fact is that often , they can only churn out dress so quick by cut corners . The only way to make this strategy work is by using cheap materials and tacky — and likely underpaid — labor , and in many cases , by copying designs .
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This conception is nothing Modern . H&M , Zara and Primark have been around for a long time and are no strangers to controversy . H&M and Primark have been process forgreenwashing — H&Mhad one case dissolve , but the other is ongoing , while Primark has been sued for allegedly pull off designs fromVans . H&M has also been draw topotential working class irreverence .
And yet , VCs find no fault in funding the next breed of these troupe . Rinse and repeat .
Shein has faced scrutiny for allegedlyusing force laborto make its products , and it ’s also been hit withlawsuitsallegingcopyright infringementfor rip off designs . Cider has also beenaccusedof copying designs , not in royal court , but on social media and by designers .
accusation like these hurt firebrand . And even the perception of labor and right of first publication malpractice can open up a company up to a slew of legal battles that will be dearly-won , regardless of whether they terminate up getting charged . In the worst case , if such allegations are proven true , they would result in VC money being parked in an unethical business , which is n’t really a great look . I ’d make love to know what LP think if and when that happens .
Of course , there is also the environmental encroachment that these companies have . The firm - fashion industry generates more pollution than the aero and maritime industriescombined each year . I ’m not saying that every VC needs to only adorn in carbon credits and clean energy startups , but their money would be far better spent on inauguration that are not actively making the environment risky . In 2024 , you could even argue that it ’s timbre deaf .
As environmental regulation proceed to get stricter across the man , fast - fashion companies need to take a moment to review their priorities . If they do n’t get unripe fast , they are setting themselves up to potentially being coerce to alter their source and business practices . That would be pricy and could be enough to cause a alteration in strategy .
Investing in these companies also bets against consumer trends . Sure , enthrone in the apparel and retail industry is always a bit of a gamble since it ’s grueling to predict where consumers will lead next , but honourable consumption has been a growing movement for more than a decade . People want to experience they are getting an ethically source and produce product , and their rank are billow .
dissipated fashion , of course , does make a lot of money in the short - term , so I get why VCs are swarm — that ’s capitalism , child ! But in many ways , these company seem to be more troublesome than they are worth . Plus , back a company that is n’t 100 % honorable sends a percipient subject matter about the beliefs a firm espouses .
VCs may not be able to bar the loyal - fashion industry , but maybe it ’s prison term they thought more about the outcome of funding it .
