Why Amara invested in Vastra- the apparel app
Have you ever been to wholesale shops for garments in a metro or tier 1/2 city of India?
This is what it mostly looks like.
As a retail customer, you would possibly not need to go there.
But I have been there multiple times when I used to run my own design startup. And while I waited to be heard over the din of the place, I did end up listening to a lot of chatter the wholesalers had with other customers (retailers actually).
This mostly involved a grumpy man sitting behind a dimly lit congested corner shouting at his staff asking for various raseeds (usually handwritten receipts/chits) and samples which were invariably late or unavailable!
And there would, of course, be haggling with the customer about what was ordered and what has been delivered and at what price and who owes what amount to whom.
Essentially speaking the interaction, more often than not, left one of the parties unsatisfied.
But, in India, you take that in your own stride and live with it. Chalta hai! You tell yourself and move on.
And then comes Vastra. A Whatsapp-like app that connects the kaarigars (craftsmen, tailors, etc), wholesaler and retailers on a single platform. And it was a breath of fresh air.
Founded by Vikash, a software engineer who belonged to a family of garment traders and had witnessed the scene above daily, Vastra aims to structure the highly fragmented garment industry in India.
Amara was introduced to Vastra through another startup we had invested in. We loved the idea and ended up investing in it in Feb 2020
Here is its pitch deck as of Oct 2020 and its numbers sure have grown rapidly.
To expand upon why Amara invested in Vastra-
The founder-market fit is awesome.
Vikash is a diligent, young man who has seen the problem all his growing up years. Has also worked as a product manager on multiple startups’ tech team and knows the process.
The problem is worth solving
The domestic garment industry is 56 billion-dollar industry that at this moment runs mostly on handwritten chitthis (paper-based challans) or generic and clunky desktop software.
The market is ready
A decade ago, the kaarigars would not have adopted any technology but with whatsapp becoming ubiquitous, the supply chain has been fully tech-enabled but remains fragmented.
Moreover, with GST and demonetization, SMBs in India are finding a greater need to align their books and businesses from the compliance point of view.
There is user-love
It has 550+ paying customers with >75% repeat yearly signups. A lot of users have offered to invest in Vastra and some big-ticket ones have done so as well. Can there be a greater sign of a good PMF than a customer choosing to be an investor?
Fits our thesis
We invest in underdogs- Vikash is the epitome of it.
To build exciting products- An ERP that the semi-literate kaarigar and high-flying-iPhone-12-owner can use with ease is definitely exciting
That grow exponentially. Even during the Covid lockdowns it added paid users and grew 4x.
And create wealth. Vastra not only saves the owner at least 20% of his cash flow but also a lot of heartache in terms of lost opportunities.
Moving forward, we see Vastra having great potential at consolidating the heterogeneous market and also bringing in more transparency for all the stakeholders creating a large market network.
Also, with some great investors and syndicates on board, Vastra is poised to be a well-coveted Saas that can be adopted by garment manufacturers across the globe.
What is your take on Vastra’s future? Where do you think are its greatest opportunities and fallacies? Would love to know your opinion about the industry in general and Vastra in particular.
Lastly, if you have a great idea/company and are looking for investors who can help you navigate through thick and thin, do write to us at hi@amaraventures.co.
