Rare Rabbit About To Raise Rs 500 Crore Funding Led by A91 Partners

Rare Rabbit, has about to raised ₹500 crore funding from A91 and other investors, including Nikhil Kamath and the Manyavar family office.

Ravi Modi, founder of Vedant Fashions, which operates Manyavar, and Zerodha co-founder Nikhil Kamath, will also participate, collectively investing around Rs 150 crore. A91 Partners is expected to contribute the remaining Rs 350 crore.

The transaction is set to bring in approximately Rs 250 crore in primary capital, with the rest being a secondary share sale by the husband-wife duo, Akshika and Manish Poddar, according to insiders. Rare Rabbit’s valuation is estimated at Rs 2,200 crore. Previously bootstrapped, the brand has emerged as a prominent player in the direct-to-consumer (D2C) fashion segment.

Despite reaching out by The Economic Times, responses from Poddar, Kamath, and A91 Partners were not received. Siddhartha Saraf, Chief Investment Officer of the Manyavar family office, declined to comment.

Last year, discussions with Tata Capital fell through, as reported by those familiar with the negotiations. Financially, Rare Rabbit achieved over Rs 600 crore in revenue for fiscal 2024, marking more than a 60% year-on-year growth from Rs 376 crore in FY23, with an operating profit exceeding Rs 100 crore. The company reported a net profit of Rs 32 crore for fiscal 2023, though FY24 financials have yet to be filed.

Industry experts attribute the growth in the men’s fashion segment to premiumisation over the past 18-24 months, with significant growth in formal wear, casual shirts, denims, and trousers. “Many premium brands have crossed the Rs 1,000-2,000 crore revenue mark as apparel premiumisation proceeds at a rapid pace,” an investor noted.

Founded in 2015, Rare Rabbit is part of the Bengaluru-based Radhamani Textiles, which also owns premium women’s fashion brand Rareism and everyday wear brand Articale. Initially an apparel manufacturer focusing on export markets, Radhamani Textiles supplied fashion products to major brands including global entities like Inditex, owner of Zara.

“Most companies either focus on manufacturing or creating a successful brand. This is a ‘rare’ example of a company doing both,” a senior fashion industry executive stated.

Rare Rabbit, led creatively by Manish Poddar with Akshika managing the Rareism label, currently operates around 135 physical stores and plans aggressive expansion post-funding. “Nearly two-thirds of the company’s business comes from the offline channel…and post the funding, the company is expected to aggressively increase the store footprint in a short period of time,” a source said. Stores are located in tier-II and tier-III cities such as Ahmedabad, Bhopal, and Dehradun, as well as metro cities including Delhi, Bengaluru, Mumbai, Hyderabad, and Chennai.

Competitors like Aditya Birla Fashion & Retail Ltd’s Louis Philippe and American fashion label Tommy Hilfiger, operated by Arvind Ltd in India, register revenues of Rs 2,500 crore and Rs 1,000-1,200 crore respectively. Marks and Spencer, managed by Reliance Retail in India, recorded over Rs 1,600 crore in revenue for FY23 with significant earnings.

In a year where many brands have experienced slower growth, Rare Rabbit’s performance highlights powerful trends in the premium men’s fashion space. The brand’s planned expansion and strategic funding reflect its strong positioning in the market.

Source: The Economic Times

Disclaimer: This information is covered based on the latest research and development available. However, it may not fully reflect all current aspects of the subject matter.

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