The Souled Store raises Rs 135 cr from Xponentia, mulls IPO in next 3-4 yrs

The Souled Store, a direct-to-consumer (D2C) apparel brand, has raised Rs 135 crore – around $16 million – in funding led by Xponentia Capital. The company’s existing investors Elevation Capital and RPSG Capital also participated in the round.

The firm will use the fresh capital to expand into new product categories and launch over 100 stores pan India within the next 2 years. The investment will also be used to offer a buyback of 100 per cent of vested employee options.

“One of our biggest growth levers at the moment are our offline stores. We currently have 12 stores, of which 8 were opened in the last year itself. We have another 4 or 5 more in the pipeline,” Vedang Patel, CEO, The Souled Store, told Business Standard. “Each of our stores turned profitable from the day they were launched, and we are aiming to reach 100 to 200 stores in the next three years.”

The Souled Store is sitting at an annualised revenue of over Rs 450 crore in terms of gross merchandise value (GMV) and has raised Rs 85 crore to date. Currently, 70 per cent of the company’s revenue comes from their app and website, 15 per cent from offline stores, and another 15 per cent from online marketplaces. “We currently have 5 million registered customers on our platform. We are expecting to end this year with a revenue of Rs 240 crore, up from Rs 140 crores last year,” Patel revealed.

Around 60 per cent of the firm’s revenue comes from outside the top 10 cities and the new offline stores will deepen the firm’s presence in tier 2 and 3 cities.

Alongside its offline expansion, the company is eyeing Rs 1,500 crore in revenue over the next three to four years, after which it plans to launch an initial public offering (IPO), Patel revealed.

“Xponentia seeks to work with entrepreneurial teams that are setting new standards to disrupt their markets and create high growth business models. The Souled Store has established a distinctive brand and is in the process of creating a large community that identifies and relates with its casual wear products,” said PR Srinivasan., Managing Partner, Xponentia Capital Partners.

Founded in 2013 by Patel, Aditya Sharma, Rohin Samtaney, and Harsh Lal, the company offers official merchandise for brands like Marvel, DC, Netflix, Star Wars, and Harry Potter, among others. “Pop culture is our design language. We do pay royalties to our partner brands but we sell them all under The Souled Store brand,” Patel said. The firm offers a bevy of products ranging from t-shirts, boxers, backpacks, and shoes, to socks, pins, badges, etc.

“Around 30 per cent of the company’s products are manufactured in-house while the rest is outsourced to various parts of the country. We strongly believe that our products should be made in India,” he added.

According to Patel, the brand has amassed a cult-like following among the youth. “Our design first thinking, high product quality, and deep understanding of the youth has helped us become a truly distinguished brand,” he said. “We aim to build India’s largest casual wear destination for the youth.”