Former Zomato senior executive Mohit Gupta and Myntra founder Mukesh Bansal have raised $26 million in seed money for their omnichannel fashion startup Lyskraft, making it one of the largest early-stage rounds for an Indian startup amid the ongoing funding crunch.
The round was led by Peak XV Partners, formerly Sequoia Capital India, Gupta told ET, adding that the seed money will help the partnership take forward the plan of building an omnichannel play as a marketplace for premium brands, starting with women’s fashion and subsequently expanding into other lifestyle categories.
The large seed investment in Lyskraft is another example of continued investor appetite for backing ventures founded by returning entrepreneurs and seasoned executives.
Global tech investor Prosus, Belgian investment fund Sofina, and partners of DST Global were among the other investors in this round. Makemytrip’s Deep Kalra and Rajesh Magow, and Zomato founder Deepinder Goyal also participated in the financing, according to Gupta.
Gupta will be the chief executive of Gurgaon-headquartered Lyskraft while Bansal will take on the role of a strategic advisor and a shareholder. He will have no operational involvement in the firm.
After cofounding fashion ecommerce company Myntra and fitness startup Cultfit, Bansal is now working independently on a deep tech, artificial intelligence startup, people in the know said.
Bansal had stepped down as the CEO of Cultfit last year, following a stint at Tata Digital, which he had joined in 2021 to scale its super app Neu.
A year ago, when Gupta and Bansal joined hands, the idea was for Meraki Labs–a startup incubator run by Bansal–to explore raising capital at the holding company level along with picking up funds for different startups within its fold. Bansal has backed companies like stock-broking firm Groww and spacetech startup Skyroot Aerospace.
Lyskraft’s pop-up luxury store in Gurgaon’s Ambience Mall
Lyskraft’s premium push
On Lyskraft, Gupta said it was the premiumisation theme–which is evident across consumer categories–that led him and Bansal to pick the top-end of the market for the venture.
“The premium fashion category in India needs to be treated differently, which he believes over the next 5-10 years is going to be large enough to be treated as a vertical,” he said. “Specifically, within this, women’s fashion is a particularly hard category, and we think that the solution to that is not only online or offline but omnichannel, and that’s what we have set out to build.”
Gupta left Zomato in November 2022. He was elevated to the post of cofounder and was instrumental in building and steering the company’s food-delivery business. Prior to that, he had been in Makemytrip for a decade, and was its chief operating officer at the time of his departure in 2018. He has also worked at packaged foods and beverages giant PepsiCo in India.
According to Gupta, Lyskraft has brought on board 15 brands in the premium women’s apparel category and will not manufacture on its own.
The company will compete with the likes of Nykaa Fashion, which operates online as well as offline outlets, in addition to pure digital players such as Flipkart-owned Myntra, Reliance Retail’s Ajio and Tata Cliq.
Gupta said Lyskraft opted for omni-channel instead of starting online-first because they were looking to solve the problem and not be focussed on a particular channel.
“If I want to solve a premium occasion wear problem for you – whether Indian, western or Indo-western–the issue (for the customer) is not whether it’s available online or offline…we are looking at this as a consumer and a category problem and not a channel problem. The best answer we saw for this was omni-channel, which is why we’re taking that route from day one,” he said.
Gupta said, “The offline piece has to be deeply curated because the brick-and-mortar ecosystem can only support a certain amount of inventory. Even online, we don’t believe that creating an open marketplace is the best answer….but we are very early in our journey and will shape things as we discover them. Our starting thesis, however, is curation.”
According to an investor presentation by Nykaa at its October-December earnings, India’s overall fashion market is estimated to be around $147 billion in size, of which $49 billion is online fashion.
Gupta said Lyskraft’s current addressable market is a few billion dollars, but estimates it to grow to $12-15 billion in six to seven years.
