Grana, an online clothing retailer creating luxury fabrics and wardrobe essentials at guilt-free prices, has secured an additional U.S $3.5 million in seed funding allowing for international growth and expansion. The lead investor is Golden Gate Ventures, along with investments from MindWorks Ventures and Bluebell Group, bringing their to- tal funding to date at U.S. $6 million, with additional Series A funding pending.
Founded by 32-year old Australian Luke Grana, the brand offers timeless wardrobe essentials from fabrics sourced around the world, including Chinese Silk, Mongolian Cashmere, Irish Linen, Japanese Denim, Peruvian Pima Cotton, French Poplin, Chinese Cotton Twill, Italian Merino Wool and Japanese Chambray. Grana designs its merchandise in-house and works directly with fabric mills in order to bring the highest quality clothing to customers at the best possible price.
Grana operates online and deals directly with their fabric mills, cutting traditional middlemen costs. Once the fabrics have been selected, Grana’s in-house product team designs the collections. With a focus on the perfect fit, Grana’s wardrobe essentials are designed to last far beyond the season.
Grana has grown extensively since its March 2014 beta launch, during which the brand sold 2,000 Peruvian Pima Cotton t-shirts in three weeks, shipping to eight countries directly from Hong Kong. Month-over-month sales are currently increasing by 40 per cent since Grana launched in October of 2014.
What will Grana use this funding for?
The new round of funding will expand Grana’s shipping to new markets as well as aid the entry into the U.S. and China markets. The funds will play a critical role in new product category launches such as leather goods, undergarments and activewear.
“We’re pleased to receive financial backing from Golden Gate Ventures and MindWorks Ventures. The support is critical to our U.S. expansion, a priority market that already represents 20 per cent of our global sales,” said Luke.
“This new investment allows us to further disrupt the online clothing market and provide consumers with luxury-quality wardrobe essentials without the luxury price point.”
Since launching, Grana has brought a number of pop-up “Fitting Rooms” to consumers across Sydney, Singapore and Hong Kong, and mostly recently opened a U.S. location in San Francisco in December 2015.
Designed as a showroom instead of a retail shop, customers can experience the brand personality in the space, interact with Grana Cheetahs (customer service representatives), and discover the website. Retail showroom spaces are increasing in popularity, and Grana’s Fitting Room model is helping to lead this global trend.
The new funding will also allow Grana to open additional Fitting Room locations in the U.S. and provide support for a technological upgrade to the shops, reinventing the way people buy clothes in-store.
“In a world where start-ups are disrupting established industries, Grana is disrupting how to build a global brand with bottom-up marketing from their biggest fans, city by city,” said Vinnie Lauria, Managing Partner at Golden Gate Ventures.
“We envision Grana’s model of providing the highest-quality modern essentials at revolutionary price points as the future of retail,” said David Chang, Partner at MindWorks Ventures.
“This investment round provides Grana with greater capacity to expand its growing Fitting Room network and product range and develop its omni channel strategy.”
As part of its international expansion and growth in existing markets, Grana will also use the newly acquired funds to build out a global world-class team. Currently, Grana has over 40 employees in Hong Kong, and most recently has added team members in San Francisco.
Who are the people behind Grana?
Grana has two co-founders, Luke Grana (Founder & CEO) and Pieter Paul Wittgen (Co-Founder & COO).
Luke has over a decade of entrepreneurial experience, beginning his career in hospitality where he started multiple espresso bars in Australia that were successfully acquired within the year of being founded. He then shifted his focus to the electrical vehicle market when he was 24, founding ChargePoint in 2008. The company was acquired in 2012, and is currently the leading electric vehicle infrastructure provider and network operator in Australia and New Zealand.
Prior to founding Grana, Luke spent six months working for French Connection and Zara in 2013 to gain hands-on experience in retail, learning about styles, price points and the world of fast fashion. From this experience, Luke recognised the market need for a brand to offer customers high quality fabrics, at great prices and is the foundation of Grana’s business model as an international ecommerce brand. His aim is to bring a high level of quality into the fashion industry at disruptive prices – making quality accessible to everyone.
Moving to Hong Kong to launch Grana
In early 2013, Luke was looking for a location to set-up the brands headquarters and identified Hong Kong as the ideal strategic location given its tax benefits, reputation as a manufacturing hub and having the world’s largest air freight – ideal for international shipping. In September 2013, he packed his bags and moved to Hong Kong, bringing US 150,000 of his own money to set up the business in a 500 sq ft warehouse in Kennedy Town.
Within the first three weeks of launching the Grana Pima T-shirts to scope market demand, stock sold out and was distributed to eight countries. Given the strong success of the Pima tees, Luke went to look for capital investment to start-up Grana and this is where Pieter entered the Grana world as an initial investor in early 2014, then eventually becoming a co-founder in July 2014.
Pieter is from The Netherlands and has lived in Hong Kong since 2008, has a background in investment banking with over eight years working as an analyst and associate in corporate finance for consumer and retail across Asia for investment companies including Nomura Investment Banking, Lehman Brothers.
When he met Luke, their partnership started over coffee meetings where Pieter used his expertise to help Grana raise US 1 million in investment for the first round of seed funding to support company growth.
What inspired Luke to start Grana?
“The idea of Grana ignited when I went to visit my brother in Peru around December 2012. This was when I first experienced the high quality of Pima cotton – it was the softest cotton I’d ever felt, that wasn’t expensive at all,” he told Anthill.
“At the same time, as a consumer, I was also annoyed with the inefficiencies of the fashion industry from their low quality fabrics to the 8x mark-ups on costs to customers.
“I spent time researching the material and learnt about Peruvian Pima cotton, then gave the material to family and friends to scope their thoughts on the fabric, which was really positive.
“This feedback was a key indicator that motivated the move to Hong Kong to set-up Grana as an ecommerce fashion brand and the origin story of our Pima tee.”
