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These Startups Are Trying to Solve Some of Fashion’s Biggest Problems

Fashion has a lot of problems to solve, and startups across the industry are tackling some of these challenges head on or seeking new niches to exploit.

At XRC Labs’ biannual Demo Day event Tuesday, independent streetwear marketplace Trill, bra alternative brand Nuudii System, reusable shipping packaging company Returnity and Recurate, a peer-to-peer resale app for Shopify sellers, were among the 14 startups given an opportunity to pitch to potential investors, partners and customers on how their ideas can revolutionize retail.

The startups highlighted at Demo Day were participants in the retail and CPG accelerator’s 14-week Cohort program. Startups accepted into the program receive $100,000 in capital, operational strategy and mentorships, and access to a network of corporate executives, entrepreneurs, investors, industry leaders and conferences.

While the intimates industry has already seen significant direct-to-consumer competition from emerging threats such as ThirdLove, AdoreMe and Aerie, Nuudii System positions itself as a brand “for women who hate bras” and addresses a varied lifestyle, “from sleep to yoga, and work to wedding.” The product, which CEO and founder Annette Azan says “is not a bra, but an innovation in utility and fashion” can be worn more than 12 ways, and is designed to enhance the wearer’s unique and natural shape.

Azan compared Nuudii’s Tee System to that of leggings, in that they built a massive market outside of pants and fill “the gray space between bra and braless.”

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With Azan stating that the bra and sports bra markets are slated to reach $38 billion in 2024, Nuudii has an opportunity to carve out its own niche, starting with a deal to sell select products on starting in January. Azan said that Nuudii has observed just a 4 percent return rate so far, a far cry from the 40 percent rate seen elsewhere in the sector.

Nuudii has averaged 20 percent month-over-month growth, most recently surpassing $110,000 in monthly sales in November, its highest total ever.

While Nuudii showed what one brand can accomplish, the Trill marketplace is aimed at getting many independent streetwear designers out in front of both brands and fanatics worldwide, according to founder and CEO Rahul Tiwari. Tiwari wants to give consumers a chance to wear unique merchandise that won’t break the bank, and he believes bringing independent brands onto a single platform goes a long way.

“Why should we always hear about a dope underground designer from our friends?” Tiwari asked. “Why should I go to Korea to experience the local streetwear? In the world of on-demand food, why can’t we have on-demand fashion sitting on a couch? There are luxury marketplaces like Farfetch. There are reselling marketplaces like StockX, but not every Gen Z shopper has the money to spend $3,000 on Louis Vuitton sweatpants.”

A Trill shopper wearing a puffer from Shadow Banned, a Neo-Punk brand based out of Broward County, FL started in 2018 inspired by all types of art including anime, skate culture and 90s & 2000s fashion.
A Trill shopper wearing a puffer from Shadow Banned, a Neo-Punk brand based out of Broward County, Fla., started in 2018 inspired by anime, skate culture and 90s & 2000s fashion. Trill

The machine-learning-powered marketplace curates a bespoke feed for consumers every time they visit the site, with product recommendations alongside a community of streetwear fans to engage the shopper. The company does not have a sales team and does not acquire designers, according to Tiwari, and only takes in brands by reference to maintain the quality of the marketplace.

When Trill went live in January, it had only 20 users, who would generate $1,000 in monthly sales. Within nine months of active operation, the company has 300,000 customers who generate $500,000 in gross merchandise volume per month. The Trill community extends to its following of 50,000 Instagram users.

While Trill’s target market is $9 million in the U.S., the company is further expanding into the European market, where it believes streetwear aligns further with consumer tastes. Combining the Asian, U.S. and European markets, Tiwari says the total addressable luxury streetwear is $250 million, and is growing at a rate of 8 percent year over year.

Resale program, reusable packaging among sustainability investments

XRC Labs also considers sustainability as one of its largest investment considerations, and was an early investor in recommerce, according to founder and managing director Pano Anthos.

“Apparel, which has been one of the worst polluters in the world on top of clothing price drops, has meant more ‘wear and throw away’ than ever before,” Anthos said. “We’re huge fans of alternative models of consumption, and we believe resale, recommerce and rental are all important.”

Recurate happens to be one of the beneficiaries of XRC Labs’ interest in the recommerce space, with the technology giving businesses the tools to launch resale marketplaces for “pre-loved” products on their Shopify store. The end-to-end solution handles integration, shipping and customer service so that brands can launch a resale program within one week, according to founder and CEO Adam Siegel.

Shoppers who want to sell a used product can return it to the brand, select the item from their purchase history and immediately list it for resale. While Recurate recommends the price, the consumer ultimately gets the final say and it appears directly on the brand site once approved.

Siegel says the company pays the seller in cash or store credit after the product is delivered, and takes 10 percent of each used product sale, while brands can select their own margins by offering store credit payout of their own, as well as a lower cash payout option.

Recurate is still in the nascent stage, beginning its beta test in August with six brands, with most early adopters coming from fashion.

Ultimately, the company aims to give existing brands a whole new revenue stream that not only incentivizes existing consumers to remain loyal, but leverages the lower pre-owned prices as an acquisition strategy for new customers.

Another sustainability-driven brand, Returnity, pitched its cost-effective, customized packaging capabilities. The packaging replaces cardboard boxes and poly-bag mailers for both B2B and B2C companies. CEO Mike Newman said that the company’s packaging, made from recyclable materials, is guaranteed for at least 40 reused shipments.

So far this year, Returnity says it has its doubled revenue, with an expanded client base including Rent the Runway, DHL, New Balance, Estee Lauder and Anheuser Busch, among others. The company expects to hit the $5 million revenue mark next year.

“Reusable packaging enables a future for packaging to create supply chain efficiency instead of waste,” Newman said. “There are 100 billion parcel deliveries this year, and that is projected to more than double by 2026. With corrugated prices rising 8 percent or more, the cost of single-use packaging to retailers’ bottom lines will continue to increase. We’re hurtling toward a future that doesn’t include cardboard boxes and single-use plastic.”

Additional companies at the event included connected mediation system Aduri, online female health community Allbodies, connected fitness platform Axius, gamer-specific skincare and beauty brand Evenprime, e-commerce privacy company Invisit, B Corp-certified loyalty app Makeena, sustainable home redesign company Outlines, nutritional soup brand Proper Good, predictive sales recommendations solution provider Salesbeat and alternative payments platform Yuansfer.

On Oct. 26, XRC Labs opened applications for its 11th cohort. Over the past five years, XRC Labs has funded 86 companies, 35 percent of which are run by women while 30 percent are founded by people of color. Approximately 500 applications were reviewed for the 10th cohort, which has worked with XRC Labs since August and will conclude the program in January.