Barclays has led a $6.6 million Seed round in Responsible, creators of an embedded finance platform designed to enable circularity in the fashion industry.
Founded in 2021 by Irish entrepreneur, Mark Dowds and Australian, Mitch Doust, Responsible operates a technology platform called Buy Back that is deigned to provide shoppers and brands with an overview of the value of returned garments.
Says Dowds: “The fashion industry manufactures billions of items every year and only 5-7% of these clothes are sold for a second time. We are enabling brands to not only become accountable for everything they produce, but also to financially benefit from a more circular and sustainable business model. Data sources like Black Book and Glass’s Guide transformed the automotive industry, we plan to do the same in fashion.”
The technology is integrated at the point of purchase to inform shoppers of the residual value of the item they are about to buy. The shopper is free to wear the garment and return the product at any point in the future in exchange for credit at the Buy Back price stated at purchase.
The Buy Back plugin is immediately available within the Shopify eco-system and the new funding will be used to expand the firm's reach throughout Europe and extend its network of brand partnership.
Andy Challis, co-head of principal investments, Barclays, said: “Innovation in the fashion industry is critical in reducing global carbon emissions, and Barclays is delighted to support Responsible as it continues to scale and address this issue. Responsible has developed an innovative model which enables circularity in the fashion industry, partnering directly with brands to extend the life of garments and impact sector-wide change.”
Twig, another UK circular economy fintech with a similar offering to Responsible has also been raising funds, picking up $35m from a group of investors led by UK-based fintech specialist Fasanara Capital with support from executives from LVMH, Valentino, Balmain, Tod’s, Swarovski, L’Oréal, Barclays, Goldman Sachs and Scalapay.
Like Responsible, Twig allows users to sell or trade-in clothing or electronics in return for instant cash, which can then be used towards future purchases.
Twig is also preparing to add a crypto lure to its offering. Due to launch with its first partners in the second half of this year, Twig’s platform will enable digital and physical items to be traded by users, either for cash or in exchange for digital assets such as cryptocurrencies and non-fungible tokens (NFTs).