Alibaba Innovation Ventures, Softbank China and Sequoia Capital China have jointly led a US$50 million series C round in Yi23, a women’s clothing rental start-up. GSR Ventures, IDG Capital, Zhen Fund and a number of other Chinese investment firms also participated, according to a company announcement.
Alibaba Innovation Ventures is the corporate venture capital investment arm of Chiense e-commerce giant Alibaba Group.
Yi23, which also operates under the brand Y Closet, will cooperate with Alibaba on fashion e-commerce, providing the start-up with a massive user base and expand its traffic. Alibaba said the investment represents another avenue for the e-commerce giant to develop its New Retail strategy.
“(We are) fully convinced that Yi23’s garment-rental business model and its open platform strategy will liberate new potentials in the garment and clothing sector,” Alibaba said in a statement.
For a monthly fee, Yi23’s members have unlimited access to fashion items in different styles and brands. Yi23, which charges RMB299 (US$46) for monthly membership, will be able to convert some of the rental items into purchases.
Yi123 was officially launched 19 months ago and focuses on providing members with high quality garments rental services. Kenzo and Acne Studios are some of the brands that Yi23 currently partners with. Garments are washed and ironed after each use before being sent to other members. The company has partnered with Chinese dry cleaning company Fornet to streamline its services.
The company also operates warehouses across the country to meet high demand for logistic services and inventory management. Alibaba is expected to be able to assist the start-up in this area.
Yi23 has completed three rounds of financing from some of the best-known venture firms in China. It’s series A round was led by GSR Ventures and angel investor Wang Gang. IDG Capital, Zhen Fund and GSR joined a series A+ round. Chinese investment firm Panlin Capital led a series B round, with GSR, IDG and a couple of smaller Chinese funds participating. No information on these round’s timing and financing totals were disclosed.