U.K. luxury handbag subscription platform Cocoon has completed a funding round that includes Kering and Simon Beckerman, founder of Depop, as investors.
Also participating in the round was Lilly Wollman, former partner of investment firm Generation Investment Management, the company co-founded by former U.S. Vice President Al Gore. The total investment raised was more than 2.5 million pounds ($3.5 million).
Cocoon said the investment “strengthens Cocoon’s position in the U.K.’s circular fashion space.” The company will scale the Cocoon platform via investments targeting depth and selection of inventory, enhanced logistics and further tech development.
“From day one we have been selective and considered about our growth partners, so we are thrilled about the backing from such well-respected and informed investors,” Ceanne Fernandes-Wong, Cocoon’s CEO and co-founder, said. “With Kering’s incredible history, proven track record of innovation and deep luxury knowledge, it’s fantastic to have investment from such a powerful market leader. We are like-minded in our vision for a sustainable fashion future and our respect for the luxury codes.”
She noted that the market is calling for innovative sustainable solutions and that Cocoon’s “subscription-based model allows for consistent revenue generation through a challenging time.” The company said that despite industry-wide challenges, Cocoon has seen “more than a 200 percent increase in membership since April 2020.”
“We have an ambitious innovation strategy at Kering which aims at identifying potentially disruptive trends and shaping the future of luxury fashion. As part of this strategy, Kering, through its ventures arm, takes minority stakes in services and technologies for the next generation of luxury consumers,” Grégory Boutté, Kering’s chief client and digital officer, said. “This investment in Cocoon will enable us to monitor new consumption habits and digital practices. We see the subscription model as a very interesting trend in fashion, and by extending the product lifecycle it resonates particularly well with Kering’s circularity ambition.”
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“We are seeing some impressive valuations for circular fashion businesses as investors recognize that sustainability is inextricably linked to the future of the sector. For me the Cocoon model has huge market opportunity and revenue generating potential which means it will become one of the most important pillars of ethical luxury shopping,” Depop’s Beckerman said.
Cocoon was launched by Fernandes-Wong and Matt Heiman, who is the firm’s chairman, in 2019 as a circular subscription service. Membership in the program allows one to swap bags for something new when they’re ready. The model provides a new approach to wardrobe planning and a more responsible and less wasteful way to satisfy a want for variety and newness. The company is also backed by Italian investor and entrepreneur Riccardo Pozzoli.
Cocoon noted that circular fashion is a $2 trillion industry sector. The sector provides a $20 billion to $30 billion investment opportunity as more luxury shoppers seek sustainable consumer options, the subscription platform said, citing to a 2020 report on “Financing the Transformation in Fashion” by the Boston Consulting Group.
“Our ambition for Cocoon is vast, and we know this investment round will allow us to increase, improve and refine our offer for existing and new customers. Global investment into the circular economy has now reached over $6.5 billion as investors back socially sustainable initiatives. They know that the option to do nothing has passed and they understand the opportunity the circular economy presents,” Heiman said.