Purple Dot, the ‘worth-the-wait’ payment option for fashion brands, today announces its seed round of €1.49 million, led by Connect Ventures, with support from, AI Seed, Moxxie Ventures, Andy Chung and Philipp Moehring from AngelList, Vijay Pandurangan and Alex Roetter (both ex-Twitter) and the family office of Paul Forster, co-founder of Indeed.com.
Founded in August 2019 by senior Skyscanner employees Madeline Parra (CEO) and John Talbott (CTO), Purple Dot is helping fashion brands tackle wasted inventory, drastic sales tactics, and the profit erosion that comes with it. Purple Dot allows consumers to request a ‘worth-the-wait’ lower price, and in return, retailers may then decide whether or not to release a product mid-season at a slightly reduced rate.
Customers pay upfront, and then wait to have the item confirmed, receiving a full refund if not. The Purple Dot payment method sits alongside ‘buy now, pay later’ finance options, but does not look to drag consumers into unsustainable debt. The UK-based startup is currently working with a variety of small boutiques across the country, and is currently in discussions with a number of major UK and US high street brands. The first major brand to partner with Purple Dot will be menswear retailer SPOKE – the integration is currently being tested and is likely to go live in November.
Typically, the ‘worth-the-wait’ price does not fall below a 10-20% reduction from the recommended retail price (RRP). This can help fashion brands reduce losses from end of season discounting, as ‘outlet’ style discounting will often involve items being sold-off at 60-80% below the RRP mark. This way, Purple Dot’s technology can help protect profit margins for fashion brands, by significantly reducing discounting levels across the lifecycle of a range of products.
The idea for Purple Dot came from the childhood experiences of the company’s founder and CEO, Madeline Parra. When out shopping, Madeline’s grandmother would often ask the store-clerk to ring her if she found an item she liked that was currently too expensive – the clerk would take down her name in the sales waitlist book.
This inspired the Purple Dot offering, allowing shoppers who are prepared to wait for a better price to do so. Merchants can keep selling at full-price, but know they have a list of shoppers in their book ready to buy at a small discount.
Madeline Parra, CEO of Purple Dot, commented: “When shopping online today, customers can either pay the retail price or walk away. When they do walk away, the item goes through the discounting process, becomes unprofitable for the merchant and is resigned to landfill. This binary system isn’t working for anyone – the customer loses out on the item, because it may go out of stock in their size before they attempt to purchase it again, and the merchant loses the sale. Purple Dot tackles this problem head on by providing a new way to shop, taking on unsustainable, unrelenting consumerism, poor pricing tactics and profit-crunching sales at the same time.”
Pietro Bezza, General Partner at Connect Ventures, stated: “For Connect Ventures our investment in Purple Dot extends our thesis of investing in teams who leverage software and a product-first approach to solving real-world problems. Purple Dot’s innovative proposition benefits retailers by creating a solution to their inventory problems. End of season ‘panic sales’ have long caused financial uncertainty for retailers and a negative impact on the environment in equal measure. We’re very proud to have partnered with Madeline and John in their mission to change the way we shop and to rewrite the rules of retail.”
Ohr, T. (2020, November 9). London-based Purple Dot raises €1.49 million to disrupt the fashion industry with a new fintech approach. EU-Startups. https://www.eu-startups.com/2020/11/london-based-purple-dot-raises-e1-49-million-to-disrupt-the-fashion-industry-with-a-new-finfech-approach/
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