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Bengaluru’s Rare Rabbit Secures ₹150 Crore in Funding Led by A91 Partners

Rare Rabbit
Preeti Bali / 7:54 am / July 1, 2024

Bengaluru-based fashion brand Rare Rabbit has achieved a significant milestone by securing its first round of institutional investment. The company has raised ₹150 crore (approximately $18 million) in primary capital, led by investment firm A91 Partners. This funding marks a pivotal moment for Rare Rabbit, which has been independently operating since its founding in 2015.

Investment Details and Share Allotment

To raise the ₹150 crore, Rare Rabbit’s board issued 69,230 compulsory convertible preference shares, each priced at ₹21,670, as per regulatory filings obtained from the Registrar of Companies. A91 Partners emerged as the lead investor, contributing ₹102 crore to the round. Notably, this investment also saw participation from Zerodha’s founders through their NKSquared entity, which infused ₹29 crore. Gruhas Proptech, Ravi Modi Family Trust, and Vendant Modi collectively contributed ₹18.92 crore.

Post-Investment Valuation and Shareholding

Estimates from TheKredible suggest that this funding round values Rare Rabbit at approximately ₹2,350 crore ($283 million) after the allotment of shares. The filing further reveals the distribution of ownership following the investment. A91 Partners’ emerging fund now holds 9.65% of Rare Rabbit’s capital, while NKSquared and the Ravi Modi Family Trust acquired stakes of 4.15% and 2.13%, respectively.

Potential for Larger Funding Round

Industry reports indicate that this investment might be part of a larger fundraising effort by Rare Rabbit. Earlier reports suggested the company was in discussions to secure a total of ₹500 crore, with A91 Partners again playing a leading role.

Brand Overview and Performance

Rare Rabbit has carved a niche in the Indian fashion market by specializing in designer clothing for men and women. The brand boasts a strong physical presence with over 100 stores across the country and caters to online customers through its dedicated web store.

The company has demonstrated impressive growth, reflected in a 72.3% year-on-year revenue increase to ₹381 crore in FY23. Notably, Rare Rabbit also achieved profitability in FY23, with a net income of ₹32 crore. Unconfirmed reports suggest the company’s revenue climbed to ₹600 crore in FY24.

Competitive Landscape

Rare Rabbit faces competition from other established fashion brands. Notably, Souled Store, a competitor, recently raised around $29 million and reported a revenue of ₹235 crore in FY23. Other rivals like Snitch and WROGN have also secured funding in recent months, attracting $13 million and $15 million respectively in December 2023 and June 2024.

Increased Investment in Fashion and Apparel

This funding round for Rare Rabbit signifies a broader trend in the Indian fashion and apparel industry. Over the past few months, several other fashion brands have secured their first institutional investments. In May, A91 Partners led a $21 million round in TechnoSport, while Libas received $18 million in funding from ICICI Venture’s fund. This surge in investment highlights the growing confidence of investors in the potential of the Indian fashion market.

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