Otrium, an Amsterdam-based startup, has received 120 million in series C funding and made it to the headlines. The famous startup assists not only brands but retailers in selling unsold inventory. BOND, Index Ventures, as well as Eight Roads Ventures, provided the startup with the required money. Otrium rose to fame because of several factors. In this article, we’ll look at the revenue model of Otrium, how it has utilized its funds, and its recent growth only to end up being more aware of the startup’s potential advantages for your company.
Brief Overview of Otrium
Online store Otrium sells a variety of stylish items in different categories. Clothing, innerwear, footwear, and accessories are all featured in the product catalog of the venture. Both users of iOS and Android devices can download the mobile app and enjoy the end-of-season fashion. The fashion industry and Otrium have teamed up to make sure that every piece of clothing is worn, to help sell every item that has already been made, and to give manufacturers the resources they need to create lines that they can be confident will be successful.
Fashion houses are awarded complete control over pricing, promotion, and visibility of their excess inventory while selling end-of-season collections on Otrium. According to Otrium, about 12% of the apparel that is manufactured is unsold. And so, the CEO and co-founder of Otrium, Milan Daniels wants the company to eliminate unsold seasonal inventory as soon as they can, and for that, they follow a two-step strategy.
- First and foremost, they assist fashion businesses in maximizing their earnings by helping them find homes for apparel goods that might otherwise go unsold.
- Second, they use their thorough analytics to assist brands in determining which apparel, in what quantities, and at what pricing will be the most popular in the future.
Otrium Headquarters and Series C Funding
The main office of Otrium is situated in Amsterdam at Danzigerkade 16A. Otrium’s debut into the US market was anticipated to be accelerated by the series C financing, which even ramped up further unsold fashion capabilities and hired new personnel. Juliet de Baubigny, a general partner of BOND, promised to join Otrium’s board of directors as part of the agreement. In a fresh round of funding which was co-led by BOND and Index Venture, Otrium raised a whopping $120 million just a year after it raised around $26 million in a series B round.
At present, Otrium is available in Europe and Online sales could increase by up to 25% in the next few years due to the pandemic’s boom in online purchasing, according to Liz Bacelar, Global Executive Director of IT Innovation for Estee Lauder. Most outlet stores are not linked to online shopping, and thus, Otrium could spur expansion in this area.
Which Brands Have Joined the Company?
Otrium, a marketplace with more than 300 brands, has recently welcomed new brand partners, including,
- All Saints,
- Temperley, and
They even joined established affiliate companies like:
- Alex Chung,
- Karl Lagerfeld,
Otrium uses proprietary technology to help fashion brands find customers for every piece of clothing they produce, thereby reducing the amount of clothing that is thrown away. Through its managed marketplace, Otrium also enables brands of any size to easily launch their own outlet store.
Three million people have signed up for the service, which provides customers with a customized off-price fashion experience on a wide selection of designer and luxury labels. Three logistical hubs located in the Netherlands, the UK, and the US enable the market to serve over 20 markets throughout Europe and the US.
How Much Revenue is Generated by It?
Looking at a company’s revenue streams is among the most popular approaches to assessing its profitability. One of the most typical sources of income is advertising fees, which are essential to many sectors of the economy, including the media, software, and service sectors.
Otrium also disclosed that its revenues had tripled in 2020, that it had over 3 million registered users, and that it now had over 300 fashion businesses on its app. It has also claimed that revenues have more than doubled in the year 2021 and are anticipated to increase more in the coming years.
How Are the Funds Utilized?
The business claims that the additional funding would be utilized for two purposes:
- Speeding up its international expansion into the United States and,
- Expanding its technology capabilities which is aimed at decreasing unsold fashion in the future.
According to Otrium, the Series C funding will assist team expansion and employment through hiring, tech platform development, acceleration, and multiplication.
How Otrium is a Marketplace for Designer Clothes?
Otrium claims to have hundreds of cult brands and designer labels all in one spot. On their website and app, you can easily explore and purchase digitally curated style modifications that are not only smarter for your wardrobe but the wallet and industry also. During sales, everything is reduced by up to 75%! So, it becomes easier to take advantage of the best offers at amazing rates while having exclusive access to premium and luxury brands. The goal of the start-up is to become an international online equivalent of designer outlet malls like Bicester Village outside of Oxford, La Vallee Village close to Paris, or Woodbury Commons close to New York City.
The company has said multiple times that fashion is frequently left deterred and so it’s such a shame considering the resources invested and the people that lose out. Together with their affiliated brands, the business is here to address this problem smartly.
Considering what the firm said, it can’t be denied that a lot of wastage can be witnessed in terms of clothes which can be recycled and sold efficiently. Thankfully, Otrium has provided that marketplace to the brands with unsold designer clothes.
Competitors and Investors of Otrium
Some of Otrium’s competitors are companies in a similar space which are mentioned below:
|The Black Tux||Grailed|
|The Editor’s Market||JUNIQE|
With a long list of investors, Otrium rules the market. A few of the crucial investors of the form with their year-wise investments are listed below:
|January 2016||Boralis BV||€200K|
|June 2016||Keadyn, Ton Van ‘t Noordende||€600k|
|January 2018||Fred Gehring, Ludo Onnink, Stash Ventures||€800k|
|May 2019||Index Ventures||€7m|
|May 2020||Eight Road Ventures, Index Ventures, Hans Veldhuizen||€24m|
|March 2021||Eight Road Ventures, Index Ventures, Bond||€120m|
Recent Growth and Revenue Model
Retail analysts claim that the Covid-19 pandemic, which has prompted many countries’ stores to close when infection rates spiked, has resulted in higher-than-usual volumes of unsold inventory. However, some businesses were able to cancel orders last year when lockdown first occurred.
According to the Dutch entrepreneurs, Daniels and Klijnstra, this dynamic helped Otrium bring on more new brands over the past year, bringing the total number of businesses it works with to “more than 300.”
Otrium has an incentive not to offer excessive discounts to move the goods because it gets compensated on a commission based on a percentage of the price of any things it sells. To do this, the business created a “dynamic pricing engine” that examines supply and demand as well as the most popular products. Customers want to shop on the site frequently due to the power of the dynamic pricing engine, which is also a major factor in which manufacturers choose Otrium, according to Rimer, an investor at Index Ventures. Since the onset of the pandemic, the company has experienced amazing growth.
The company also released additional analytics functionality, which aids fashion houses in analyzing historical demand to discover whether pieces have to stay power and may eventually become iconic goods for brands. According to Milan Daniels, “The business is confident that in the next few years, there will be a rebalancing in the fashion industry, with less reliance on fresh seasonal launches and more sales being driven by iconic goods that brands sell year after year”.
The company will assist brands in determining which of their products will be in demand in the future and at what cost and quantity. The revenue model of the business is quite profitable and growing. The current expected yearly income for Otrium is $47.9M and the expected revenue per worker at Otrium is $159,500 which is again very promising.
The success story of Otrium is inspiring in many ways. If you have a clothing brand and you are looking for potential tie-ups and investments in such ventures, you can partner with Otrium using this link Otrium Demo Request. So, don’t just wait, go and explore a world of new opportunities. Good luck!