Thread, the online platform shaking up the way men shop with personal stylists and AI algorithms, has secured $22m in a Series B funding round that includes investment from H&M’s CO:LAB fund.
Capital raised by the UK-based start-up, which now has 1m active users and 100 staff, has reached $40m and founder Kieran O’Neill says he wants to transform the business into a household name.
As well as H&M, which had been a small investor in the Series A round, other backers in the latest fundraise include existing investors Balderton Capital and Beringea, Forward Partners, noted retail investor Maurice Helfgott and former Lane Crawford deputy president Sebastian Picardo. The business will also be offering customers the chance to take a stake via a Crowdcube campaign launching next month.
Serial entrepreneur O’Neill told The Industry that the business, which he founded in 2012, had seen a ramp up in its membership in the past 18 months reaching 1m users of which 25% say they buy all of their clothes via the platform. Some 30% of the customers are based in the capital with 70% outside, and O’Neill said they were attracted by the personalised offer.
“Our customer ranges in age from their late 20s to their early 50s. Because of the personalisation, these quite different guys are getting a great experience,” he said, adding that the platform was taking share from both the high street and the first generation etailers.
“I believe that in the future the majority of transactions online will be personalised.”
Kieran O’Neill, founder, Thread
“For a lot of guys going to the high street is a chore rather than something they look forward to and with traditional etailers there’s an overwhelming choice. I believe that in the future the majority of transactions online will be personalised,” O’Neill said.
Thread works by inviting men to complete an online questionnaire on their preferences and assigning them a personal stylist. The human stylist is complement by AI, which learns the customer’s preferences and each user gets a completely unique set of ideas, tailored to them. Customers can also browse an online store containing just clothes that suit them. Unlike other stylist-led platforms, Thread is not “surprise” subscription box led and men can shop as often as often as they like according to their own budgets.
Brands on offer on the site range from multinational names to emerging labels and high street favourites and in the past 12 months it has added 50 new brands to its line-up including Barbour, Hugo Boss, Levi’s and Ted Baker, along with up-and-coming names such as Wax London, Kestin Hare and The Workers Club.
O’Neill said he planned to extend the business beyond the UK as the problem of men not enjoying the traditional shopping experience “exists everywhere” but he said he wasn’t ready to put a date on international expansion just yet. Nor was he ready to announce a move into womenswear, but it is something he is considering. When the business was established it did initially offer men’s and women’s but O’Neill quickly decided to focus on menswear.
He added that Thread’s approach had encouraged a smarter, more sustainable approach to shopping. “Buying something and not wearing it is bad,” he said. “We definitely see that men are buying less but better and when you have a stylist who can explain to you why it’s worth spending that extra £20 on a jacket, you can do that.”
Around 65% of the platform’s sales are made via mobile web and O’Neill said an app would be launching “pretty soon” which he expected to be a popular way of using the service. All the information gleaned via AI on customer behaviour may well be translated into an own-brand offer in future but O’Neill said the focus for now was to “position the brand Thread as the service”, and in turn to make that brand “a household name”.