We fight overconsumption with smart apparel that repels stains, odour, wrinkles and reduces washing.
|Clothing & Accessories Mixed Digital/Non-Digital B2C
|3 Jan 2017
- EBITDA-profitable and revenue growth of 43% YoY in 2022
- 97% growth Jan-April YoY*
- Proprietary technical fabrics
- 103,000 customers in 82 countries
We will keep the round open until €2m is reached. This is the amount we believe we can deploy in the coming 24 months without jeopardizing the core profitability of our business.
LABFRESH is a textile science company disguised as a menswear brand. Washing something after just one wear is so 20th century. Our mission is to use the most innovative textile inventions to make life-proof menswear.
Thanks to our proprietary stain, odour and wrinkle-repellent fabrics our customers on average wear our shirts and t-shirts for 3.5 days between washes. Because in our opinion the only way to clean up the fashion industry is to develop garments that are more durable and can stay fresh and clean for many days.And when we do it with 97% recycled fibres that only makes the equation even better for your wallet and the planet.
*based on unaudited management accounts
Substantial accomplishments to date
1.) EBITDA-profitable and revenue growth of 43% YoY in 2022
Profitability is the holy grail for direct-to-consumer brands. Especially in these times when margins are under pressure. We are fortunate to have been focused on profitability in due time, and in a way that enables us to grow revenue by more than 40%.
2.) Developing our generation 4 fabrics, reaching a level of 97% recycled fibres without compromising on stain, odour and wrinkle repellency.
This is currently only for classic shirts, pants, and undershirts. By 2025 we pledge to use recycled or bio-based fibres in 97% of our collection.
3.) Building one of the strongest communities in menswear:
- 103,000 customers in 80+ countries
- 57% of 2022 revenue from repeat orders
- Financed by our customers since day 1 - no banks or institutional investors. We have done this via pre-paid pre-orders (to finance new product launches) and crowd loans (to build the Amsterdam and Copenhagen flagship stores).
Pure players are having a hard time reaching profitability. LABFRESH is digital-first, but we utilize our own retail stores in Copenhagen and Amsterdam to increase new customer conversion and reach an audience that just doesn’t like ordering new apparel online when they don’t know their fits and sizing. In 2022 78% of revenue was online.
As a vertically integrated brand, we will continue to develop our own fabrics to keep our quality and margins high. The gross margin in 2022 was 68%. At €99 we do not make cheap shirts. But considering the technology and that all shirt fabrics are made in Portugal and Italy we believe this is solid pricing.
For more information on our business plan and pitch, download our pitch deck in the "Documents" section
Use of proceeds
1.) Increase fabric inventory levels
For 6 years we have had long delivery times and frequent sell-outs. Post-funding we plan to increase raw materials inventory with the aim to reduce production costs from 5 months to 5 weeks, enabling us to introduce a true Never-Out-Of-Stock program.
2.) Scale Germany & the UK
With €1.7m accumulated revenue in Germany and UK, we think it is time to give it a real go. Phase 1 includes a localised website, marketing, customer service, shipping partners, payment options, and email flows. Only when scalability and profitability have been proven online we will venture into retail.
3.) Retail expansion
Our flagship stores in Copenhagen and Amsterdam have become profitability and loyalty drivers. Therefore we plan to utilize the funding to open more retail stores. We are confident we can double our retail footprint without increasing HQ overhead. We aim to scale ecom along with retail so that retail sales remain at a maximum of 40% of total revenue.
Please note that any discounts, rewards and/or offers listed by a company in its campaign are subject to the terms and conditions applied by that company. It is the company’s responsibility to honour such discounts, rewards and/or offers and Seedrs does not take any responsibility for them.
The company has the following outstanding loans:
- €200,000 loan from Crowdaboutnow at an interest rate of 4% per annum. The loan is to be repaid on April 2025
- €400,000 loan from Crowdaboutnow at an interest rate of 4% per annum. The loan is to be repaid on November 2026
- €156,007 Corona debt at an interest rate of 1% per annum. The loan is to be repaid in monthly instalments of €3,200 until 2027.
- €430,811 running VAT debt from 2023 Q1 and Q2.
The funds raised from this investment round will not be used to repay these loans.
Investors in this round are investing in and will become shareholders of LABFRESH B.V (68187874), registered in the Netherlands. This is the holding company for the group. LABFRESH ApS (43393375) is a fully-owned subsidiary registered in Denmark.
Investment Agreement Breach
An error in LabFresh’s bookkeeping system incorrectly reflected product exchanges as new revenue, leading to incorrect accounting records. As a result, the company’s financial position was incorrectly presented to its lead investor in 2018, at the time of the company’s last major funding round. The company was unexpectedly forced to use a portion of the lead investor’s investment from that round to pay off certain debts, in each case in breach of the applicable investment terms.
To address the issue, and with the full support and agreement of the lead investor and other existing shareholders, the lead investor will be receiving €89,614.14 worth of shares of the same share class and at the funding round share price of €55.42 to keep their 30% ownership until this round reaches €214,608 raised and then gets diluted pro-rata as the other shareholders. The amount has been factored into this round’s share price. The breach has been rectified, and all outstanding rights have been settled, leaving no further obligations.
The company currently has 1 class of shares, Ordinary shares. All investors in this round, including Seedrs investors, will be receiving Ordinary shares. Ordinary shares have voting rights and no exit or liquidation preference.
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