5 Critical Questions for FashionTech Founders and Investors [TPM Season 1]
Understanding the Market, Risks and Opportunities in FashionTech.
FashionTech’s a rocket ship preparing for take off.
It’s a category filled with potential and rapidly attracting attention (look no further than the massive increase in FashionTech instagram, TikTok and Substack pages and content in the past year). But it’s still working through road blocks that are delaying its full ascent.
As a FashionTech founder myself I’ve experienced firsthand and have heard from countless fellow founders about the common road blocks to build and fundraise in this category.
So this season, I’m tackling 5 key questions that map the FashionTech landscape, identify opportunities, and navigate the risks of this dynamic space. Let’s get started.
The 5 Critical Questions for Founders and Investors in FashionTech
Question 1: What is FashionTech, what’s the market landscape, who are they key stakeholders?
First, a foundational question… or three.
While technology in fashion isn’t new, the term “FashionTech” and the community building around it is a relatively recent development. Before we dive into bigger topics, we need to define what FashionTech is, map out the market landscape, and identify the key stakeholders.
What we’ll explore:
How industry insiders define FashionTech.
The history of FashionTech and the OG players who shaped the category.
Key exits and milestones that have defined the space.
This question sets the stage for everything else, helping us understand where we’ve been and who’s already at the table.
Question 2: What are the tech, social and regulatory changes impacting FashionTech?
Beyond the tech advancements that are transforming all industries (yes, AI infiltrated FashionTech too), there’s a ton of regulatory movement having a major impact on fashion.
Add to that the industry’s symbiotic relationship to culture and social shifts, and it’s clear that external forces are key to understanding opportunities in FashionTech.
What we’ll explore:
Emerging technologies like AI, blockchain, and AR/VR impact on fashion.
Social trends driving consumer behavior and brand priorities.
Regulatory changes, from sustainability mandates to labor laws.
Understanding these forces for any niche is critical for founders and investors.
Question 3: What are the exit opportunities for FashionTech startups?
For founders fundraising (especially with institutional VCs) and investors funding the space, it’s important to keep an eye on what exit opportunities exist beyond IPOs.
What we’ll explore:
Historical buyers and acquisition trends.
Emerging exit pathways.
Creative business models that could unlock new opportunities in this realm.
I’m honestly very interested to dive into this as exit strategies are one of the most under discussed topics in the FashionTech community today.
Question 4: What are the common risks and challenges of building / investing in FashionTech?
Opportunity doesn’t come without risk—and FashionTech faces challenges that are unique to building tech for a creative industry.
I’ve said it before but a lot of advice coming from established tech niches are irrelevant if not actively unhelpful when applied to Fashion. So let’s define the risks unique to this space that founders aren’t learning from other startup resources.
What we’ll explore:
Common pitfalls for startups serving the fashion industry.
What Fashion leaders believe are best practices when collaborating.
Lessons from the founders who’ve cracked the code.
We don’t gate keep here. I’m excited to start gathering the hard earned lessons from the FashionTech hive mind so future founders and investors don’t have to keep learning the same lessons the hard way.
Question 5: What are the FAQs investors have about FashionTech?
As a founder, one of the most frustrating challenges is having to sell investors on the category of FashionTech before you can even pitch your own business. Let’s capture those FAQs so we can start answering them as a collective.
What we’ll explore:
The most common questions founders get from investors about FashionTech.
Investor tips for founders to avoid this conversation trap while pitching.
Insights from investors who are bullish on the category.
Pitching is all about de-risking for investors and selling the vision, so we’re going to do that for the category as a whole, so founders can get back to pitching their startups.
My goal, first and foremost, is to bring you the most thoughtful answers to these big questions.
Methodology: How I’m Tackling these Questions
My goal, first and foremost, is to bring you the most thoughtful answers to these big questions. So over the next several months, I'll be building a comprehensive analysis of the FashionTech landscape through:
Conducting in-depth interviews with founders, investors, and industry experts
Analyzing market data and emerging trends
Synthesizing insights from successful (and failed) FashionTech ventures
Building a collaborative knowledge base with input from this community
Along the way, I'll share regular updates including key insights, interview highlights, and emerging patterns. Each question will culminate in a comprehensive analysis that brings together these diverse perspectives and data points.
Are you in?
If you are, here’s how you can get involved:
Share your thoughts: Which question are you most excited about? Are there any sub-questions or topics you’d like me to explore?
Suggest experts: Do you know someone I should interview or a resource I should check out? Email me at biz@rachel-sterling.com
Spread the word: Share this with founders, investors, and fashion/tech friends who should be part of this community.
Teaser for what’s next:
In the next posts, here’s what you can look forward to:
Interviews with industry leaders: I’ll be sharing conversations with funded founders, a fashion innovation executive, and investors who are actively eyeing the FashionTech space.
Market map: I’ll start sharing a comprehensive market map of FashionTech businesses, categorized by their focus areas (e.g., resale, rental, supply chain innovation, search).
I’m excited to start tackling these questions and support the work of this growing space and I hope you are too. Stay tuned—and don’t forget to subscribe if you haven’t already!