LONDON — The British Fashion Council is breaking the mold, inking a deal with venture capital firm Venrex that will support innovative businesses and create a new funding pipeline for the council’s education and talent programs.
The new fund, Venrex BFC Fashion I, will support “nontraditional” fashion businesses that have “strong creative, innovative and commercial credentials,” with seed, early stage or growth stage funding. These will be clothing, tech- or sustainability-focused businesses in the wider fashion firmament, rather than pure clothing or accessories labels.
An announcement is expected Wednesday.
Businesses tied to the BFC and those outside the organization’s network will be able to apply for investment. The BFC will act as a facilitator, using its network to put brands in touch with Venrex. As a not-for-profit, it will not be involved in the final investment decision.
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The BFC and Venrex did not disclose how much money the first fund had raised or plans to invest.
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In an interview, BFC chair Stephanie Phair said the new fund was part of a white paper following an investors’ roundtable cohosted by the BFC and Sian Westerman, non-executive director, in 2019.
The white paper concluded that “there are many opportunities to develop businesses at the intersection of creativity, innovation and commerce.” The paper noted that “highly creative businesses should not necessarily be pushed to high growth, but can benefit from talent identification schemes and programs.”
Phair said the BFC recognizes that it can “help enable a vibrant ecosystem” by supporting nontraditional businesses.
“The fashion industry landscape is drastically changing, and as businesses look toward a sustainable future, there is a real opportunity for the BFC to support a pool of talent with different and disruptive business models in partnership with a fund that has a unique understanding of this complex industry,” she said.
Phair added that when she took up her role as chair, she was keen to take a closer look at what was happening in the part of the British fashion industry that “wasn’t high-end design, or the high street, but rather brands that are a very, very important part of the fashion ecosystem. In order to have a very vibrant ecosystem, we have to support the enablement businesses.”
Mark Esiri, founder and chairman of Venrex, an early investor in businesses such as Charlotte Tilbury, Lyst, Olelbar Brown and Cefinn and a longtime supporter of British entrepreneurs, said the hope is to partner with “some of the U.K.’s highest growth fashion-related businesses.”
Esiri said experience has taught him that the U.K. creative sectors, colleges and entrepreneurs are “world class. We have also found that there has been a lack of capital available to start-up and growth businesses in and around fashion. We have found success in backing best-in-the-world talent, and we are lucky enough to have a partner in BFC which can convene not only people from the U.K. fashion but people from across the globe. We should be able to help the highest growth opportunities to get started.”
The fund will serve another purpose: In addition to investing in fashion-related start-ups, it will generate a new revenue stream for the BFC.
The BFC will receive fees and a percentage of profits realized from the investments, which it plans to funnel to its existing fashion education and talent programs.
During the interview, Phair described the new venture as a “fund with a purpose” because it will not only allow the fashion ecosystem to grow, but will also help the BFC support emerging talent.
The fund has already invested in three companies: Intimately, Vollebak and Digital Village.
Intimately is an adaptive intimates brand for disabled women. It has redesigned bras, underwear and sleepwear with a new fastening technology that’s meant to make getting dressed easier.
Vollebak is a clothing brand that fuses tech, innovative and recycled materials into pieces such as the Solar Charged Jacket, which stores and re-emits light, and the Garbage Sweater, which is made from old bulletproof vests and firefighter suits.
The third investment is in Digital Village, which allows people to create in Web3 and integrate their digital assets and lifestyles into its own metaverse. Digital Village is aiming to become “a welcoming, comprehensive and diverse ecosystem” that will enable members to “showcase, wear, use and exchange their digital assets with their communities.”
Asked how important “purpose” has become in investment nowadays, Esiri noted that Venrex also manages the Innovation RCA Fund I for the Royal College of Art.
“We feel that an investor’s role is to support entrepreneurs rather than causes, and I do not think that has changed. Entrepreneurs, however, recognize that their customers are very often purpose-driven, and aim to design products and services that fulfill this need. Many businesses in the past have enjoyed purpose — and been highly successful investments — so I feel it would be doing them down to assume they were any less deserving than the missions that drive people today. Clearly, collective values change over time and business follows.”
The new fund also fits into the framework of the BFC’s Positive Fashion initiative, which it has described as an “engine room for change” and a motor behind a more responsible fashion industry.
Its aim is to help businesses future-proof themselves and adapt to climate change, to promote “equal, diverse, empowered” workforces, to examine the positive impact that fashion has on communities, and the role that skills and craftsmanship can play in sustaining local livelihoods.
The fund also is a sign that life is returning to normal here.
The roundtable and white paper that generated the idea of creating a fund took place in 2019, but it never got off the ground because of COVID-19. By spring 2020, the BFC was on war footing, drawing up a survival fund from the pool of money that would have gone into its 2020/21 talent support initiatives — NewGen, Fashion Trust, and the BFC/GQ and BFC/Vogue Funds.
During the pandemic, the BFC Foundation COVID Crisis Fund awarded a total of 1.5 million pounds mainly to designer businesses, with a portion of the money going to students. The BFC also launched a fundraising campaign, asking businesses and individuals alike to donate to the industry.