Farfetch unveils start-ups it will fund and mentor ahead of IPO
Farfetch, the luxury-focused internet marketplace and New York IPO candidate, unveiled on Tuesday the first batch of start-ups it will mentor and invest in as part of its Dream Assembly project aimed at giving it access to promising technology and services in the fields of retail, luxury and fashion.
The race to grab market share in the fast-growing fashion and luxury e-commerce market is goading every major player to invest and build relationships with start-ups that will give them the talents, know-how and technologies to remain competitive many years from now.
Around 9 percent of luxury sales are currently done on the Internet, a number industry analysts expect will rise to 25 percent by 2025 – by which time the global market for luxury goods should have reached more than $450 billion, up from $307 billion in 2017.
Farfetch selected 11 budding companies operating in fields ranging from artificial intelligence, blockchain, closet-sharing, pre-owned luxury items, image recognition, virtual reality and sustainable sourcing.
“The companies we have selected for the first Dream Assembly cohort all have great potential to present innovative solutions and are capable of shaping the future of commerce,” said Stephanie Phair, Farfetch's chief strategy officer. Phair is also chairman of the British Fashion Council and a former Net-A-Porter senior executive.
Farfetch’s initiative comes as the world’s biggest luxury group, LVMH, launched a similar project in the spring, called la Maison des Start-ups which includes companies working in similar fields to those selected by Farfetch’s Dream Assembly. LVMH gives the start-ups visibility, mentoring and offices, but no funding, even to winners of its much-advertised LVMH Innovation Award. This month, fashion online retailer Net-A-Porter unveiled a mentoring programme for emerging designers to which it gives visibility by promoting them on its site and via emails and seasonal campaigns.
Farfetch declined to say how much money it planned to invest in the selected start-ups. The London-based company will welcome the first group of start-ups in Lisbon on Sept. 7. It will enroll them in a 12-week programme that includes workshops, one-to-one sessions with Farfetch senior leaders and mentorship meetings. Farfetch said it would also give the start-ups networking opportunities. Burberry would also be contributing "knowledge and resources," but no further details were given.
Among Farfetch's selected start-ups, there is Shopvious, based in France, a provider of blockchain-based digital certificates, Fashpa, from Nigeria, which connects consumers with brands and boutiques selling sustainable merchandise. From the United States, there is Villageluxe, which helps users share their closets and Wishi, which connects people with an online personal stylist. And there is also Upteam from Hong Kong, which supplies authentic pre-owned items to shops online and offline and Footsy from Canada, a mobile application that scans one’s feet and using AI and a smartphone for a personalized footwear collection.
“We foresee a revolution in retail, powered by ultra-personalisation via digital technologies,” Farfetch founder and chief executive José Neves said in a letter published in the company’s filing to the US Securities and Exchange Commission last month in preparation for its initial public offering. Neves is preparing himself to embark on an international roadshow to woo investors ahead of his company’s flotation on the New York Stock Exchange this autumn, market conditions allowing. Analysts estimate that the IPO could value Farfetch at around $5 billion.
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