Online fashion rental start-up Klozee closes down

Online apparel rental start-up Klozee wants to shut down some shops within six months to raise its maiden round of funding. The closure speaks of the stress in the pre-owned apparel sale and rental segment. Klozee had failed to gain scale after its funding.

A dozen-odd employees at Klozee, which was owned by Humble Egg Technologies, have joined fashion store Voonik Technologies and home design start-up Livspace. The former is backed by Sequoia Capital while the latter is by Bessemer Venture Partners. The founders of Klozee, Aman Haji, Pratik Moona and Prashant Jain have joined Livspace. In February this year, Spoyl, an online marketplace for pre-owned apparel, had acquired rival Revamp My Closet.

Klozee was one of the 15-odd start-ups that mushroomed in the past 18 months in the pre-owned branded and designer apparel and renting garments. Companies such as Share Wardrobe, Elanic, Envoged, Etashee and Stylish Play are marketplaces for pre-owned premium women’s apparel brands while LibeRent, FlyRobe and SwishList rent premium brands and designer wear.

The premium women’s wear market is a Rs 9,000 crores segment, about 6 per cent of the Rs 140,000 crores women’s apparel market. Not many venture capital firms have placed bets on such start-ups in India. The other start-ups to have received funding are Elanic, Envoged and Zapyle. On the other hand in the US and China, investors have poured in funds into the companies in these segments.

Haji, Co-founder and CEO at Klozee explains the reason behind closing down as demand not shaping up as they wanted. Klozee did 12-15 orders per day. The idea was good but it would have required a lot of money and investment.