Fashion blockchain start-up Retraced raises 1 million euros in seed funding

German start-up Retraced uses blockchain technology to collect data in the value chain of fashion brands and thus contributes to transparency in the supply chain: While companies can use an innovative tool to check and optimise their supply chain, end customers can trace the extent to which their consumer behaviour influences the environment and the lives of the people involved with a particular product.

European VC firm Samaipata supports the concept with one million euros in seed funding. The funds will be used to bolster the cloud-based solutions’ suite of features, and to fuel the tech company’s continued expansion in an apparel industry focused on sustainability, transparency and impact management.

40 fashion brands are already using the Retraced platform

The new investment round follows a successful pre-seed round from 12 months ago, which included business angels and the local Düsseldorf NRW Bank. Despite the Corona pandemic, Retraced managed to win 40 new brands in the EU and the US to the platform, helping them manage their supply chains better and achieve their sustainable development goals. The company attributes the success to an underlying strong interest in supply chain digitalisation for improved transparency and sustainability management.

“Our clients have clear sustainability targets in mind that they want to achieve. Together with them we have defined the necessary information that they need to manage their sustainability efforts and to evaluate their progress”, says Philipp Mayer, co-founder and CPO of Retraced, in a press release published on Tuesday.

“We’ve benefited from their input, and continue to improve our efficient tracing and document management tools, supplier sustainability assessments, end consumer communication widget and other core functions to help them get the actionable overviews they need to get the most out of their investment in sustainability. We are here to accelerate and guide their sustainability efforts,” adds Mayer.

Fashion industry is interested in digitalisation and transparency

For early-stage VC Samaipata who invests in digital platforms and marketplaces at seed stage in Germany, the UK, France and Southern Europe, investing in Retraced is in line with a strong market trend: supply chain transparency and sustainability is becoming a core issue for leading companies at global scale.

“We truly believe we are entering a new era of enterprise transparency towards the end-consumer, given the growing regulatory pressure on compliance management, and the reputational cost of not facing increasing demands from new consumers. 90 percent of Generation Z affirms that companies are responsible for dealing with social and environmental issues, and we believe there’s an amazing opportunity for a platform play in the space, leveraging on network effects between brands and other stakeholders sharing data and best practices and willing to work together for a fairer supply chain management,” explains José del Barrio, founding partner at Samaipata.

The funding comes at a critical time, as the industry continues to look for new solutions for addressing challenges, such as the traceability of fabrics, government regulations mandating the social welfare of workers in the supply chain, and the environmental impact of textile manufacturing processes.

The investment deal also signals an important opportunity for fashion during a time where the fallout from the pandemic affects the stability and health of supply chains. The values of transparency, compliance, and social responsibility are becoming more important for helping the industry recover and succeed. Retraced focuses on partnering with their clients to aid them through the challenges of organising and managing their impact and CSR efforts efficiently through one single platform.

The young company uses the crisis as a chance to establish values like transparency, compliance and social responsibility within the fashion industry. “Covid-19 represents a huge challenge, but at the same time a unique opportunity for fashion to refocus and rebuild. We are building a platform that will help brands produce better, manage their responsibilities to all of their stakeholders, and stay ready for what’s to come,” comments Lukas Pünder, co-founder and CEO of Retraced.

“We are excited about the timing, and the opportunity to partner with Samaipata on our journey. Their expertise in strengthening digital platforms will help us get closer to our vision. We look forward to making 2021 the year of action and change, the fashion industry desperately needs,” concludes Pünder.

Image: Retraced