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There may be no companies more eager for competition than start-ups in the plus-size-fashion world.
"The landscape is this big," says Lauren Haber Jonas, founder and CEO of the three-month-old social commerce company Part & Parcel, holding up her thumb and index finger to approximate the size of a pencil eraser. "All of the plus-size founders and CEOs, we all know each other. We're all sort of connected because, again, we could sit at this table, it's that small." (We're not, it should be noted, sitting at an especially large table.)
While to some this might seem like an advantageous position for a business to be in, Haber Jonas doesn't see it that way. "The ultimate underlying reality for anyone that's in this space is that more people should be in this space, and how can we support that?" she says.
Other founders and investors echo this refrain—not just as a matter of principle, but as an imperative for the future growth and evolution of their own companies. "We know that this market and this space will be stronger with more people in it," says Alexandra Waldman, creative director and cofounder of the size-inclusive brand Universal Standard, which serves sizes 00 to 40. "We really want the whole industry to turn its head and to think about broadening accessibility to more American women."
About 68% of women in the U.S. wear a size 14 or above, according to Plunkett Research, and yet this customer accounts for only 15% to 20% of total apparel spending. The past couple of years have seen a wave of new entrants into the space—plus-dedicated subscription boxes, size-inclusive denim labels, mall mainstays that have expanded their size ranges, and more. And yet there's still a huge disparity between the shopping experiences available to a size 20 customer and those encountered by a size 2.
In order to change that, though, the start-ups who are largely leading the charge need to find investors willing to put millions behind their ideas. In corporate-speak, this means finding venture capital (or VC), a form of financing given by a firm or an investment fund to an entrepreneur to use in order to start their business. The process relies heavily on risk assessment and growth potential, since the VC firm's intent is to make a profit—and in order to get funding, a start-up has to prove the risk is worth it.
For Haber Jonas, the fund-raising process was a reminder of what women—and plus-size women in particular—are still up against in the VC world. "I was 28, I was a solo founder, I was a woman, I was a first-time founder. I was also pregnant, and I'm Mexican," she says, recalling that she "got a lot of pushback on my person" even before she got pushback on the business.
"Pattern recognition is something that's pretty important in the world of venture capital," she says. "And I’m not a pattern people recognize."
Nadia Boujarwah, the cofounder of the plus-size personal styling service Dia&Co., says she believes investors lean too hard on the tactic of trying to match opportunities with previous successes. "Those are things that fundamentally work against minority founders and minority-focused businesses," she says. "Because until we prove there can be huge success in a space like plus-size fashion, there's no pattern recognition that works in your favor in the early stages."
It doesn't help that less than 10% of venture capital's decision makers are women, per an Axios survey, and of those, almost none are plus-size, says Haber Jonas: "[We need] representation of people of various sizes in venture capital. As you fund-raise as a plus-size person or for a plus company, the knowledge and the understanding of the problems that the shopper faces can't be personally felt unless you've felt them, or you have the ability to think outside of yourself." She found the latter in Lightspeed Venture Partners, which led Part & Parcel's $4 million seed round. But many other founders aren't so lucky.
In 2014, when Boujarwah was first trying to raise seed funding for Dia&Co., she found this was easier said than done. "The thing that was so confusing to us was why investors couldn't immediately see the importance of the problem," she says.
From her perspective as a lifelong plus shopper, the opportunity in the market was obvious. "It's always been so clear to me that something was deeply disconnected," she says. Investors, though, wanted more proof. So she and cofounder Lydia Gilbert exhausted their own savings and then sought out funding from friends and family, an option Boujarwah says they were grateful to be able to make, even if it added an extra layer of stress to going home for Thanksgiving. It wasn't until December 2015 that the company raised its first round of institutional investment, securing a reported $3 million in seed funding.
Rebecca Kaden, a partner at the venture capital firm Union Square Ventures, participated in that round at her previous firm, Maveron; in November 2018 she led Dia&Co.'s $40 million Series C round at USV, bringing the company's total capital to date to $95 million.
When she first met Dia&Co.'s founders, she recalls, the business was still nascent: "There wasn't the rich data science that there is today. There certainly wasn't the team there is today. There wasn't the kind of deep customer insight there is today. But what was clear was that Nadia had a true customer centricity that I think is rare and really valuable. She was the customer, she believed in the customer, she knew how to serve them, and she had instincts around what they were looking for that were really spot-on."
That early in the game, a founder's ability to tell—and sell—their story can be the difference between a no and a seven-figure check.
By the time Haber Jonas was pitching Part & Parcel to potential investors, she had already built a community through her plus-size fashion blog, The Pear Shape; launched a successful Kickstarter campaign for a pair of wide-calf leather riding boots that came in four widths; and was an executive at Poshmark, leading growth and expansion. Despite her fashion bona fides, though, she wanted to find an investment partner who understood that her vision for the company went far beyond just selling products.
"What I was pitching was building a platform for plus-size women that serves her at every point in her life—or as many as we possibly could tackle—such that she can live in a world where she can thrive as a plus-size woman," she says. "So initially that meant we need to create great products for her, we need to create community for her, and we need to create economic opportunity for her."
For now, the latter two aspects come by way of the start-up's "plus to plus" model, a sort of souped-up referral program that allows fans of the brand to sign up as "partners" and earn a 20% to 30% commission by evangelizing the products within their networks—the impetus for which, she says, was the rampant workplace discrimination that plus-size women still face. The brand also offers what it calls "dimensional sizing," giving customers the option of adding extra room in the bust or biceps for a more tailored fit.
Put together, the concept added up to something unique, says Jeremy Liew, a partner at Lightspeed. While he sees many brands that follow the typical digitally native vertical brand playbook, "in those instances you want to see it working because that's a relatively crowded market with a lot of people pursuing similar strategies. But I think Lauren is taking a very differentiated strategy that gives her a lot of blue ocean."
At Universal Standard, Waldman and cofounder Polina Veksler are trying to carve out a new space entirely—one that does away with segregating "plus" and "straight."
The founders bootstrapped the company from their savings at first, which Waldman says gave them a valuable degree of freedom. "It allowed us to make mistakes, allowed us to learn very quickly. It allowed us to do what perhaps was contrary to more seasoned advice." Universal Standard’s first round of investment—$1.5 million led by Red Sea Ventures—gave it a short runway from which to start ramping up the business, after which they got to work raising their Series A.
“We wanted to work with people who we felt had our best interests at heart, who understood what we were trying to build, who understood that there was going to be trial and error for us. That primarily meant other entrepreneurs," says Waldman. Not just any entrepreneurs, either: The $7 million round, which it closed in February 2018, was led by Imaginary, the venture capital firm founded by Net-a-Porter founder Natalie Massenet and investor Nick Brown, and joined by Red Sea Ventures, Gwyneth Paltrow, MatchesFashion's Tom and Ruth Chapman, Toms' Blake Mycoskie, SoulCycle's Elizabeth Cutler, and Sweetgreen's Jonathan Neman and Nicolas Jammet.
Elsewhere in the industry, though, Waldman says she still sees investors underestimating the potential of the space: "The biggest barrier to entry right now is the lack of knowledge and understanding on the investment side. I've heard of several people who were trying to move into the space being told, 'Oh, it's saturated now. There's enough.' Which is absolutely absurd. There is so much room for people who are trying to build brands with a broader spectrum of sizes."
To combat this thinking, she says, more established brands need to keep expanding their size ranges to prove that the market is there to meet the supply—something Universal Standard is helping to do through its partnership with J.Crew (and another major brand to be announced soon, she says).
This, perhaps, could help close the gap between what's offered to women who wear above a size 12 and those who wear a 12 or smaller. According to Liz Muñoz, CEO of the plus-size retail chain Torrid, there are about 62,000 freestanding specialty stores in the U.S. that cater to straight-size shoppers, compared with around 2,000 that sell plus sizes (600 of which are Torrid stores). Stores that carry both? It's too new of a concept to even be on the map yet.
At the upper end of the market, the luxury online retailer 11 Honoré is throwing its weight (and venture capital) behind the effort to make broader size ranges the norm. In March 2018 the company, which serves sizes 10 to 24, secured $8 million in Series A financing led by Redpoint Ventures, bringing its total funding to $11.5 million.
Since then it has grown its designer roster to nearly 80 brands—among them Cushnie, Veda, and Tanya Taylor—and has pushed many of them to expand past "straight-adjacent sizes" (14 or 16), says Medha Agarwal, a principal at Redpoint Ventures. Doing so has required a financial commitment on both sides (from the brands, to produce the new sizes, and from the retailers, to buy them), but the investments have been worth it, she says: Sizes 18 and 20 are now the top-selling sizes on the site.
As the market becomes bigger, Agarwal says, more brands will be persuaded to standardize their sizes and prices so that plus-size shoppers don't have to pay a premium, as they currently do with certain labels. And while most retailers vie for designer "exclusives," 11 Honoré would be happy if more of the items the site carries weren't bespoke, if only because that would make it possible to reorder fast-moving pieces partway through the season.
Agarwal is encouraged by the fact that, now, luxury brands are coming to 11 Honoré rather than the other way around. For more and more companies, she says, inclusive sizing is "no longer a 'should we do it?' but a 'if you don't, why don't you?'"
Hilary George-Parkin is a writer and editor based in New York City.
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