An activewear brand has to offer something extra-special in order to stand out in a segment dominated by Lululemon, Nike and Under Armour, and littered with look-alike upstarts such as Soybu and Outdoor Voices. And let’s not forget Forever 21, H&M and Old Navy are each putting their fast-fashion spins on athletic styles, too.
But Rishi Bali isn’t sweating the competition.
In fact, the former Goldman Sachs partner is pretty pleased with how his U.S.-made yoga-inspired athletic apparel has established its presence in an over-saturated market in a little more than two years.
When he and his sister, Tapasya Bali, launched Yogasmoga in February 2013, their first collection sold out online in three weeks. Since then, the direct-to-consumer company’s staff has swelled to 40 and looks set to double this year. They opened their first brick-and-mortar store in Greenwich, Connecticut, last September, followed swiftly by a West Coast location in Los Angeles. Two more California stores are set to open soon in Newport Beach and Beverly Hills and Bali hopes to have at least 10 stores up and running by the end of the year.
But that’s not all: Yogasmoga has amassed a wealth of venture capital. It recently closed a $6.5 million round of financing, its third, and is now valued at a massive $74 million.
Not bad for a brother-sister duo without a background in fashion. But what sparked the siblings’ mutual decision to quit careers in finance in 2010 (Tapasya Bali worked at Credit Suisse) and leap into leggings?
“Nobody was addressing the yoga space at a much higher level,” Bali said, adding that because he and his sister were born and raised in the Himalayan region of India that’s widely thought to be the birthplace of yoga, they had a deeper understanding of the practice. “There’s a cultural side to yoga that I thought was not understood properly or communicated to consumers, who were instead getting a version that wasn’t as authentic or real as I wanted.”
So the siblings decided to trade finance for fitness.
The pair initially self-funded the project, spending four years researching fabric and manufacturers in Massachusetts and California before developing a proprietary technology called Aurum, a technical blend of Supplex and Lycra that uses nanotechnology to create moisture wicking, antimicrobial, pill-resistant products.
Bali boasted, “Right out the gate we knew we were 60 percent better than anything out there because our fabric technology was much better. We designed our fabric to be the Ferrari in our space.”
They also worked with a U.S.-based eco-dye lab to develop a kaleidoscope of colors that don’t bleed. (They even spent two years creating Carbon 6, a black so deep they trademarked it.)
“And because we use such high-end fibers, the colors explode,” he pointed out, adding that when the line eventually debuted “people loved it.”
The brand released its second proprietary fabric technology, Airh, last August, combining Tactel and Lycra in a construction that offers advanced moisture management and breathability.
Similarly priced to Lululemon (tanks retail from $46 to $105, leggings from $96 to $185), Yogasmoga offers women’s activewear up to size 18 (as its website points out, fitness should not stop at size 12) and a small selection of men’s pieces are available, too.
“For our target customers, a yoga pant that costs $20 comes with issues and they know it,” Bali explains. “Our customer is looking for a product that’s well made and durable. It can be washed thousands of times and it’s not going to fade and it’s not going to stretch out.”
But a top technical fabric isn’t the only reason Yogasmoga’s prices are high: American manufacturing isn’t cheap, but the duo insists on it.
“Many companies left the U.S. to go to Asia. Being Indian, I know how that environment works. Those companies are chasing cheap labor. And in a cheap labor environment there’s a lack of quality control,” Bali said. “A lot of companies say they can build quality product in cheap countries—that’s like putting a Band-Aid on cancer. I don’t want anything to do with that. I want a new solution.”
That solution is stateside production, where he and his sister can keep a close eye on everything. “We have a very discerning customer who wants a product that works in the gym and in life. He or she is wearing the stuff but working out in it. It needs to look good and be functional, too,” he said.
And it’s all in the details, like a skinny waistband that promises to banish overspill with its high-memory retention Lycra; secret pockets that discretely hold essentials without cutting into the figure-flattering designs; or strategically placed mesh ventilation in sports bras.
Another important part of the New York-based company is its foundation, Namaskar, which sells bracelets woven on hand looms in remote Himalayan villages and donates net proceeds to health, education and micro-lending initiatives in those communities.
But Bali promised Yogasmoga has a lot more up its thumbhole-sleeve for Holiday ’15, including an expanded men’s collection, as well as new stores.
“Our scale is growing very rapidly and we hope to connect to consumers in all areas they live in,” he said, adding, “Hopefully in the next couple of years, we start growing internationally.”