Cuyana, the buzzy womenswear brand, known for its “buy less but buy better” ethos is not only cultivating a dedicated following for its fast-growing premium essential garments and accessories brand. In announcing its latest round of funding, the San Francisco-based brand – which was founded in 2011 by Karla Gallardo, a former Goldman Sachs and Apple Inc. analyst, and Shilpa Shah, fresh from a stint with interactive entertainment company Kabam – is making headlines.
The Series C funding round investment – $30 million from H.I.G. Capital in partnership with d.Luxury Brands – is one of “the largest rounds raised by a female-founded fashion retail company,” per Forbes.
Since its launch as a digitally-native brand, Cuyana has expanded to brick-and-mortar outposts in New York, and California’s Pacific Palisades, Venice, and San Francisco, and also built out its offerings of responsibly sourced, high-end apparel and accessories, all the while, achieving profitability. That is something rare, Ben McPherson, co-CEO of d.Luxury Brands, told Forbes. “The fact that they’ve been able to achieve profitability is quite an anomaly in this market.”
The $30 million in funding is particularly impressive considering that Cuyana is a women-founded startup. As Harvard Business Review revealed last year, “There is an enormous gender gap in venture capital funding in the United States.” To be exact, female entrepreneurs receive only “about 2 percent of all venture funding, despite owning 38 percent of the businesses in the country.”
The Financial Times, citing a separate report published last year in the journal Venture Capital, revealed that “97 percent of all U.S. venture capital was handed to male chief executives between 2011 and 2013.” In fact, businesses with all-male teams were found to be “four times more likely to receive funds than teams that included even one woman,” meaning that while access to funding is “a challenge faced by all entrepreneurs looking to grow … for women, the struggle is all the more difficult.”
With such imbalances in mind, Gallardo and Shah’s funding to date, $31.7 million, is significant. That figure – paired with some other notable funding efforts by female founders – might even suggest that venture capital may be increasingly going to female-founded businesses, at least when it comes to retail.
Cuyana’s retail-fundraising success joins the likes of StitchFix, whose founder Katrina Lake raised nearly $80 million prior to the company’s $120 million initial public offering last year. Luggage brand Away’s founders Jen Rubio and Steph Korey have brought in $107.5 million in funding since early 2015, while Glossier’s Emily Weiss has drummed up $86.4 million for her millennial-centric, direct-to-consumer beauty brand.
Not to be outdone, Rent the Runway has brought in a whopping $416.2 million since its start in 2009 under the watch of co-founders Jennifer Hyman and Jennifer Fleiss; The RealReal, with its female founder Julie Wainwright, has raised $288 million in 8 years; and the Aslaug Magnusdottir and Lauren Santo Domingo-launched Moda Operandi has raised $293.7 million since 2010.
Women-run businesses are still lagging behind their male-driven counterparts, but upstarts like Cuyana very well might be convincing investors that unless they diversify their portfolios, they stand to miss sizable investment opportunities.