When COVID-19 struck, garment factories and textile mills shut down temporarily due to lockdowns and labour shortages. It also gave the mill owners in Surat an opportunity to ideate and experiment.
“There was synergy as the Surat ecosystem was beginning to realise that organised retail was going to be the future,” Ramya Iyer tells YourStory. She was a founding partner of the fashion brand 6Y Collective and has worked closely with mill owners.
In 2023, she founded Surat-based fashion retail startup Fantail. The company works in the man-made fibre (MMF) sector, designing and manufacturing MMF fabrics such as viscose, nylon, and polyester for enterprise fashion retailers with an expertise in ethnic women’s wear.
The B2B startup’s name is born out of local word usage. “It’s a short form of ‘fancy retail’. Mill workers and weavers in Surat look at such apparel and go ‘Oh, these are those fancy clothes’,” she quips.
Set up with an initial investment of Rs 25 lakh, Fantail operates in two cities. It has a manufacturing team in Surat and an R&D team in Gurugram. The startup has about 40 employees, with some working across various technical processes—dyeing, printing and finishing—with mills partnered with Fantail.
The rise of the organised retail market
Two months before the startup was formally incorporated, Iyer conducted some pilots with mill owners. The founder says the weaving and processing industry in Surat—India’s MMF hub—is very ‘closely knitted’, so the company couldn’t risk doing a bad job. Once the first few pilots went well, gaining the trust of the others was easier.
“If you go to a mill weaver in Surat, the first thing they’ll want to know is what their return on investment (ROI) is. Traditionally, they were in unorganised retail, functioning through the mandi system,” Iyer says.
Fantail used its funds to establish protocols with mills for quality control and output consistency, and to ease them into the requirements of organised retail.
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Iyer says the mill owners had their aha moment when they noticed that their workers had also begun going to enterprise retail stores to buy apparel. “They realised that their fabric would have to find its way into organised retail before things went out of kilter and competition increased,” Iyer relays.
The founder says an organic shift toward organised retail started ever since GST was levied on fabrics from 2017. India is the second-largest exporter of MMF textiles in the world after China; it exported fabric worth about $9.5 billion in 2021-22. Fantail saw the gap in the fabricated textile market in Surat and decided to be the bridge.
“We are building from a perspective that the asset already exists. Industrialisation 2.0 is happening in the MMF sector. All one needs to do is sweat those assets enough, make enough ROI for people owning said assets, and you get to own the brand,” Iyer explains.
The startup is working with 12 enterprise clients at present, including big clients like Vishal Mega Mart, Westside, Shoppers Stop, Libas, and Ritu Kumar’s Aarke, among others. It aims to venture into the menswear market as well.
All things R&D
Fantail’s designers and researchers work out of Gurugram. They anticipate fashion trends and create mood boards to pitch to brands. After the deal is finalised, Fantail gives the order to the mills, taking up more than 60% of the mill’s capacity utilisation.
“We don’t buy from mills. We treat them as our extended arms and legs. Taking more than 60% of the captives (mills) is how we are able to control the output,” says Iyer, adding that Fantail specifically works with mills with an annual revenue of at most Rs 100 crore.
Fantail is now building its own Enterprise Resource Planning (ERP) software. The company’s SOP, including the information on the mills it’s working with, is completely digitised and workers are trained on that system. It is also looking forward to adopting AI tools.
“We already use some AI tools in the design process. In our industry, I don’t think there is any real use of AI as yet. But we are very interested in GenAI models that can generate images,” she adds.
Funding and growth
Fantail recently raised Rs 13.75 crore in a seed round led by Riverwalk Holdings, Incubate Fund Asia, and All in Capital. The startup will invest the funds in R&D and the machinery of its partner mills. The company turned profitable last year, reporting an annual revenue of around Rs 36 crore.
“Eventually, we want to be a priority partner for India’s top retail brands. Even a 20% wallet share with 20 of India’s top retail brands will get us to an annual revenue of Rs 200 crore,” Iyer says.
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On the funding, Aditya Singh, Partner, All In Capital says that Iyer’s clarity, energy, and sharp understanding of the ecosystem made them want to invest in the startup.
“Fantail is going after one of the largest and most under-digitised sectors in India—Surat’s $40 billion MMF ecosystem. The opportunity to organise and modernise this supply chain for enterprise retail is massive. We believe it has all the ingredients to build a foundational B2B company from India,” he adds.
Fantail competes with startups like the Surat-based Fabcurate, Bengaluru-based Whizzo, Delhi-based Locofast and composite mills in Surat. However, Iyer believes what separates Fantail is its singular focus on R&D with in-depth expertise in the Surat supply chain.
Edited by Kanishk Singh
