Given the leaps and bounds that wearable tech devices, e-commerce sites and gamified shopping apps have made in recent months, it's pretty clear that the fashion tech space is growing up. One major indicator of that? Investments in the area have grown significantly in frequency and size over the last year.
At the Fashion Tech Forum hosted by Karen Harvey Consulting on Wednesday afternoon, David Freschman, the founder of the aptly named fashion investment news site FashInvest, made some predictions for the future of fashion tech. And the future is looking good.
Of the venture capitalists investing in fashion startups, Index Ventures is the most active, followed by First Round Capital and Greycroft Partners. As for the future of the startups themselves, Freschman is predicting that fashion tech startups are going to start making exits in the next few years, and those are going to take place in the form of acquisitions rather than IPOs.
But by whom? While e-commerce giants like Amazon and eBay have long track records of snapping up startups, Freschman predicts that big retailers in the fashion space are also going to start acquiring them to launch their own innovative products. That in turn means that the threat that technology poses to brick-and-mortar stores will diminish as retailers begin to work with startups and incorporate their technology into their strategy.
And exits are good for the fashion tech ecosystem as a whole: As Freschman notes, when a startup makes an exit, venture capitalists get a return on their investment, meaning they'll be able to re-invest in other fashion tech startups.
As for wearable technology — that buzziest of buzz phrases — Freschman is betting that it will soon give way to an even bigger trend in fashion tech. What will that be? We'll have to wait to see.