After Redwolf buy, The Souled Store plans up to ₹200 crore fundraise for expansion, Gulf entry
Summary
None of the existing investors will exit in this round as they are looking to hold till the IPO, which is about two years away, co-founder Vedang Patel told Mint.
MUMBAI : Mumbai-based pop culture apparel brand The Souled Store (TSS) is looking to raise ₹150–200 crore by July to fund its offline expansion, enter Gulf markets, and launch new categories following its acquisition of rival Redwolf.
“Our ambitions right now might be bigger than our purse… over the next 12 months, we plan to increase the size of our stores by 3x the current sq ft and also aim to enter the Gulf region," Vedang Patel, co-founder, TSS said in an exclusive conversation with Mint. The size of the stores is expected to increase from 60,000 sq ft to 180,000 sq ft, he added.
“For these reasons, we will raise around ₹200 crore by June-July to fund these expansion plans. None of the existing investors will exit in this round as they are looking to hold till the IPO, which is about two years away," he said, adding that discussions with bankers for a listing were underway and they would be appointed in the next 3-4 months.
“The aim of the IPO would be to unlock some value for our investors and raise capital in the future if needed," Patel said.
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Redwolf joins forces
Regarding the Redwolf acquisition, Patel said the founders – Ameya Thakur, Rahul Jaisheel, and Vivek Malhotra – would join Souled Store and bring their unique expertise to help build TSS’s next stage of growth.
Redwolf’s revenue has steadily declined over the past three years, falling from ₹11.6 crore in FY23 to ₹8.4 crore in FY24. It recorded a net loss of ₹50 lakh in FY24 after making a ₹10 lakh profit in FY23, according to data from market intelligence firm Tracxn.
In comparison, TSS has grown significantly, with ₹365.3 crore of revenues in FY24 from ₹236.3 crore a year earlier. It recorded a profit of ₹18.2 crore in FY24 after a loss of ₹16.5 crore in FY23, according to Tracxn.
“This category has become increasingly competitive as there are a lot of direct-to-consumer brands coming up in addition to private labels launched by established companies," said Satish Meena, founder of Datum Intelligence, which provides insights into consumer data. He cited examples of companies ranging from Rare Rabbit and Snitch to in-house labels of Lifestyle, Shoppers Stop, Zara, Zudio, and Aditya Birla Fashion.
“Ultimately, it becomes a game of loyalty as everyone is ramping up their strategy now. Brands like The Souled Store, which target the mass premium segment, are however seeing an uptick in recent times as they have been continuously innovating to be on top of their game to boost sales and improve customer acquisition," Meena said.
Expanding offline footprint
With about five warehouses and 42 stores across India, TSS has aggressively expanded its offline channels in recent years to reach more customers. By the end of this financial year, the company plans to increase its store count to 80, including overseas ones, Patel said. He added that on average, the company recovers its capital expenditure within 6-7 months of opening a store.
“It also helps that our products are very attractive because consumers don’t get similar products in the next 10 stores. We have also priced our products in a way that it justifies the quality and designs, so this automatically translates to better conversions and customer retention."
Patel said the company clocked ₹500 crore in revenue in FY25 and would likely bring in more than ₹700 crore in FY26. The top 20 cities contributed about 50-55% of revenue with the remaining coming from tier 2 and 3 towns, where it has doubled down in recent years.
TSS generates around 55% of its revenue online and 30% from its growing network of offline stores, with the rest coming from third-party platforms, including e-commerce and quick commerce, Patel said. Revenue contribution from official merchandise—once 70-80%—has now dipped to around 50%, as newer categories such as rugs and backpacks start to gain traction.
TSS has achieved a revenue retention rate of 140%—significantly higher than the industry average of 50-60%—driven largely by strong cross-category sales and a loyal customer base, Patel said.
“The Souled Store targets the GenZ audience, and they seem to have a good hold of that customer base while building the business profitability, so that gives them an edge compared to the rest," Meena said.
He added that TSS could capture wallet share from established players such as M&S and Zara—especially in overlapping categories—if it successfully expanded beyond India’s top 10 cities and disrupted markets in smaller towns where these global brands have limited presence.
Meena argued that rather than eyeing international expansion, brands such as TSS should tap India’s vast and diverse domestic market, which still holds significant untapped growth potential.
“While entering GCC or other international regions is a logical extension, it’s quite expensive and challenging as consumers have access to a vast number of brands. A lot of brands like to enter the GCC area as it’s operationally easier and a smaller market, but it can be a money drain if not positioned carefully."
Founded in 2013 by Patel, Aditya Sharma, Sonal Jain, Harsh Vardhan Lal, and Rohin Samtaney, TSS has raised nearly $30 million so far from institutional investors such as RPSG Ventures, Elevation Capital, and Alteria Capital. The company was last valued at over $110 million.
