Over 620 million dollars raised in Q1 2026
In the opening three months of the year, fashion-adjacent startups have raised more than 620 million dollars in disclosed funding across over 15 deals. The largest round belonged to San Francisco-based direct-to-consumer platform Quince, which closed a 500 million dollar series E at a 10.1 billion dollar valuation in March. The company, whose revenues surpassed one billion dollars last year, uses AI-driven supply chain optimisation to offer goods at a fraction of traditional retail pricing. Investors evaluated it as a technology play, not a fashion retailer.
The pattern extends beyond a single outlier. US-based AI shopping agent Phia, co-founded by Phoebe Gates and Sophia Kianni, raised 35 million dollars in a series A led by Notable Capital with participation from Khosla Ventures and Kleiner Perkins, reaching a 185 million dollar valuation. The platform reports 13 percent higher conversion rates and 50 percent fewer returns for partner brands. Nashville-based fintech company Croissant, which builds payments infrastructure for the second-hand fashion economy, secured 28 million dollars in a round that included equity and debt. Croissant chief executive officer John Howard said the platform will begin paying brands upfront for future resale transactions. Statusphere, a US-based micro-influencer marketing platform working with brands including Parlux, Kendo Brands and Express, closed an 18 million dollar series A led by Volition Capital.
Sustainability funding remains persistent
On the materials innovation side, rounds are smaller but consistent. UK biotechnology company Epoch Biodesign closed a 12 million dollar strategic round, with investors including Canadian activewear brand Lululemon, Kompas VC and Leitmotif, a venture capital firm backed by Volkswagen. The funding brings its total capital raised to over 50 million dollars and will support the commercialisation of enzymatic recycling technology for virgin-quality recycled nylon.
San Francisco-based climate-tech startup Rubi raised 7.5 million dollars, co-led by AP Ventures and FH One Investments, with participation from H&M Group and Talis Capital, to advance its CO2-to-textile platform. Cambridge-based biotech firm Sparxell secured five million dollars in a pre-series A round led by Swen Capital Partners to scale plant-based, biodegradable colour technology. Swiss traceability company Haelixa raised two million euros in a pre-series A round to expand its DNA-based product authentication technology.
Tier-one investors are entering the sector
What distinguishes the current moment is not deal volume, which has held steady at roughly 20 to 28 transactions per quarter since early 2024. The shift is in the profile and scale of investors. Firms such as Andreessen Horowitz (a16z), Khosla Ventures, Kleiner Perkins, Index Ventures and Forerunner Ventures have entered fashion technology over the past 18 months. BlackRock is reportedly preparing to acquire a stake in Lithuanian resale platform Vinted at a valuation of approximately eight billion euros. Qatar Investment Authority is in talks for a minority stake in Italian luxury sneaker brand Golden Goose. Corporate venture arms, notably Unilever Ventures and the L’Oreal Bold fund, completed multiple transactions in the quarter.
According to Crunchbase data, annual funding to startups at the intersection of AI and fashion has held steady at around 100 million dollars since 2022, while the broader AI-generated fashion market was valued at 2.14 billion dollars in 2024 and is projected to reach 75.9 billion dollars by 2035, according to research firm Meticulous Research. Startup advisory firm Waveup found that companies using AI for operations are raising roughly three times more than traditional fashion startups.
For industry executives, the implication is straightforward. When venture capital firms evaluate fashion companies through the same lens applied to software platforms, scrutinising engagement metrics, unit economics and workflow integration rather than brand equity and wholesale margins, they reprice what the industry considers valuable. The companies attracting capital in 2026 are the ones turning fashion’s persistent inefficiencies, from overproduction to opaque supply chains, into quantifiable problems with measurable, technology-driven solutions.
