fast fashion is an industry It is embroiled in labor and copyright issues, and has a huge impact on the environment due to wastewater and carbon dioxide emissions. It also has the potential to make you a lot of money quickly.
But despite all these problems, VCs don't stop loving this field.
On Wednesday, my colleague Manish Singh wrote a scoop about Accel's potential investment in India-based fast fashion startup Newme. Newme is an app-based retailer that produces 500 new items each week with an average price of $10. The news comes just a week after the company closed its seed round.
Mr. Axel and Mr. Newmy did not respond to requests for comment.
Newme is similar to many other VC-backed fast fashion startups, such as Shein, which raised $4 billion, and Cider, an Andreessen Horowitz-backed startup valued at $1 billion. Cider says on-demand inventory makes it a more ethical fast-fashion option. However, that is debatable.
Accel's potential investment in Newme was interesting to me for a number of reasons, the biggest one being that I don't really understand why VCs would back these companies.
Fast fashion companies quickly became popular and gained many fans because of their ability to get clothes from the runway to your local department store in record time. However, in reality, it is often not possible to produce large quantities of clothing quickly without cutting corners. The only way to succeed with this strategy is to use cheap materials, cheap (and probably low-wage) labor, and often copy designs.