Indian company Zyod is raising $18 million to expand its technology-based clothing production to more countries

Zyod is an Indian startup that provides a technology platform to global fashion brands to help them in the complete process from design to delivery. In a brand new round of funding, it has raised $18 million to expand its presence to over 40 countries all over the world.

The Gurugram-based startup works with Indian factories to help them produce clothing for global brands. It offers ERP (enterprise resource planning) software that it calls the “brain of manufacturing” that tells factories what needs to be produced, the way it needs to be produced, and when it needs to be produced in order that they will achieve their full potential.

More than 80,000 small and medium-sized factories in India are operating at lower than 33% capability utilization, Zyod co-founder Ankit Jaipuria told TechCrunch. Thanks to its ERP platform, the startup helps factories understand what components – e.g. fabrics – they need to use to produce clothes for a selected brand. It also explains the pattern through which the material needs to be cut and stitched, based on the brand’s requirements, to get maximum use.

Additionally, the startup has developed a every day production reporting system that gives factories with a every day motion plan. This overcomes the challenges faced by local factories and their staff in the everyday environment where factory owners manage operations via paper and pen or via WhatsApp.

“We give this daily instruction that the manufacturer gave earlier, namely: how it is to be done, when it has to be done, what has to be done – all this runs through Zyod and that is why I say that Zyod acts as the brain of production and the factories carry out the production of weapons ” Jaipuria said.

Founded in early 2023 by Jaipuria and Ritesh Khandelwal, Zyod currently serves over 550 customers in over 18 countries and has added roughly 400 customers within the last two years. The startup initially helped D2C brands with faster startup times and low minimum order quantities. However, it began onboarding enterprise clients in October and has since added major brands including Reliance Industries and Aditya Birla in India. The first clients also include the Japanese firms Urban Research, Anthropologie of Pennsylvania, the British NEXT and Boohoo, and VAN-DOS from Spain.

In January, Zyod launched a mobile application for iOS and Android platforms. It focuses on long-tail customers who want to buy quite a lot of styles on the go. The app also helps corporate customers view their orders. Zyod plans to further update the app with latest communication methods, including order approval and communication with teams via live chat windows.

The $18 million investment is Zyod’s Series A round led by RTP Global and includes participation from existing investors Lightspeed and Alteria Capital and latest investors Stride Ventures, Stride One and Trifecta Capital. The money will help the startup expand its presence within the southern hemisphere and penetrate markets akin to Brazil and Australia. It also plans to enter several underutilized countries, including Africa and the Scandinavian a part of Europe.

“Once we expand into both hemispheres, we will be able to offer consistent year-round products for our factories operating in India,” Jaipuria said.

Zyod has expanded its catalog to 10,000 styles monthly from initially 10 or 20. The startup offers brands predictions about what clothing styles people might want to buy, based on the information it collects.

With the brand new funding, Zyod wants to improve these predictions, in addition to automate the platform to allow brands to determine the style and image of the design they need to produce to obtain its pattern. The startup also plans to integrate its software with traditional sewing machines to reduce human errors.

The Series A round also includes undisclosed debt, which Jaipuria said is earmarked specifically for working capital needs.

“Zyod leverages technology to improve every aspect of the manufacturing process, from a modular design approach to optimizing factory-level operations,” Nishit Garg, partner in RTP Global’s Asia investment team, said in a prepared statement.

Zyoda’s latest funding comes after it raised $3.5 million in a seed round in April 2023. Jaipuria told TechCrunch that the startup’s valuation has increased “manifold” since its last round, without providing a selected number. The co-founder also stated that the startup generates “multi-million dollars” on an annual basis.

“We are delighted to double our partnership with Zyod,” said Rahul Taneja, Partner at Lightspeed India. “Their global network is growing rapidly and we are excited about this next phase of growth.”