Fashion is a large and vibrant industry that touches almost everyone. We buy clothes every year, we go shopping just for fun, and millions of us follow celebrities on Instagram and other online resources just to see what they wear to different occasions and try to copy their look. According to Statista, the luxury fashion market worldwide is expected to reach $133B in 2025. At the same time, the fast fashion market will reach $133B in 2026, while growing at 7.7% YoY.
Even though fashion is the industry we often get excited about, the repercussions of its rapid growth and popularity are not that exciting. According to the Ellen MacArthur Foundation, companies currently emit 1.2 billion tons of greenhouse gasses every year in the production of textiles. And it's more than those of all international flights and maritime shipping combined. Moreover, experts estimated that the fashion industry will increase emissions by more than 60% by 2030.
Recently, McKinsey’s research showed data proving operational inefficiencies in the clothing industry. The company found that 12% of fibers are still discarded on the factory floor, 25% of garments remain unsold, and less than 1% of products are recycled into new garments. At the same time, 100bn+ items of clothing are produced every year, leading to huge overstock issues and textile waste.
Therefore, according to McKinsey's research, fashion executives plan to employ several strategies to avoid overstock in the future.
Source: McKinsey’s research
Besides, the fashion industry has a huge inherent problem with transparency. Fashion Revolution assessed the transparency of the 200 biggest global fashion brands on the scale of 0% to 100%. And not a single brand scored above 80%!
Source: Fashion Revolution
Hence, Edzard van der Wyck and Michael Wessely decided to fix these issues and created a DTC knitwear brand Sheep Inc. at the end of 2019. The company produces clothing that does less harm to the environment and makes this process completely transparent to consumers. To do so, Sheep Inc. combined centuries-old techniques and modern technologies to create the first naturally carbon-negative knitwear.
Together with other investors, Flyer One Ventures invested in a startup to help the team reshape the way clothing is made and help scale its sales to global markets.
Fashion industry professional & a former tech executive came up with a solution
Before Edzard and Michael created a common project, each of them worked in different areas and roles.
Edzard co-founded Heist Studios, where he ran creative strategy and marketing for high-performance shapewear. Because of his previous experience in the fashion industry, he knows how to create a product that will become popular and loved by the target audience. Edzard’s co-founder Michael worked for many years as a top-manager in the financial industry, including his role as a Vice President at Morgan Stanley and a Chief Commercial Officer at Algomi.
Before launching Sheep Inc. Edzard and Michael analyzed the market and found that Gen-Z & Millennials would be a perfect target audience for their future product. This group of customers represents $350bn of spending power in the US alone and is one of the most conscious consumers on the markets.
Finally, Edzard and Michael combined their experience and research results to create Sheep Inc. - a DTC knitwear brand that tackles CO2 reduction using CertifiedRaw technology. Each Sheep Inc’s product has an NFC tag, which allows all customers to see the entire production cycle and digitally “adopt” a sheep from whose wool the product was made.
Source: Sheep Inc.
How does Sheep Inc. work?
Sheep Inc. is here to make the world fall in love with knitwear. They combined centuries-old techniques and modern technologies to create the first naturally carbon-negative knitwear. And this is just a tip of the iceberg.
To make Sheep Inc. as sustainable as possible, Edzard and Michael came up with a solution: bottom-up supply chain and innovation at every stage of manufacturing. The raw material comes from New Zealand, then travels to Italy to be scoured (= cleaned), and ends up in Portugal, where the final product is produced by pure skill and a little bit of magic.
Source: Sheep Inc.
In addition, Sheep Inc. delivers their products by maritime transport, and the total environmental impact is less than transportation by airplanes.
In addition to more eco-friendly delivery, Sheep Inc. created software for tracking environmental pollution at each stage of production. The proprietary CertifiedRaw technology ensures 100% visibility for brand and customer – it’s integrated with suppliers for full oversight of supply chain partners, production progress, and impact.
Sheep Inc. is well aware that farming has a huge impact on the environment. Hence, Edzard and Michael were conscious about their choice of raw materials providers and eventually partnered with certified carbon-negative regenerative farms in New Zealand.
Sheep Inc. creates knits that are 100% biodegradable. The company operates as a DTC brand, which means that Sheep Inc. promotes and sells a product or service directly to consumers, eliminating the need for intermediaries (primarily through online sales). The company chose this approach to business to produce the optimal amount of clothing.
Instagram, Tom Hardy, and Benedict Cumberbatch
The company does incredible work on its online brand: their Instagram page is hard to take your eyes off, the visuals used in promotions look amazing, and the early-stage company is well acclaimed by top-tier online media, including The New York Times, Evening Standard, GQ, The Wall Street Journal, BAZAAR, Esquire and others.
In less than 2 years, the company achieved 60k Instagram followers with best-in-class acquisition techniques, based on highly resonating social campaigns and influencer campaigns. Finally, Sheep Inc. wins the trust of famous stars. For example, in the beginning of last year, Tom Hardy wore a grey, merino wool jumper made by Sheep Inc. during a virtual presentation of Audi’s electric supercar – the e-tron GT.
Six months later, Benedict Cumberbatch, in an Esquire UK publication, wore Lupin Lilac Crewneck by Sheep Inc. Who would have thought that one day Doctor Strange and Venom’s host would appear in the universe of Sheep Inc?
In the future, Sheep Inc’s founders want to revolutionize the affordable luxury industry by making woolen clothes last longer and ensuring that the production process is 100% transparent.
In addition to producing the best in class woolen hoodies, V-necks, and even shorts and T-shirts, Sheep Inc. is planning to polish its CertifiedRaw technology to make it available for other fashion companies on the market and make their production more transparent and environmentally friendly.
Why did F1V decide to invest in Sheep Inc.
Sheep Inc. is Flyer One Ventures’ first Sustainability investment, which allowed us to make the first step towards a bigger focus on sustainable investments. Apart from that, we decided to invest in Sheep Inc. because of the following reasons:
Impressive team with experience in fashion, marketing, management and strong early hires from Pangaia, Tiger of Sweden, Ralph Lauren, Alexander Lewis, Gymshark and other companies;
Large and environmentally conscious target audience of Gen-Z and millennial buyers for D2C product;
Unique CertifiedRaw technology with a high organic interest from other large fashion brands;
Strong traction and positive unit economics with high customer satisfaction metrics;
High quality of products and a chance to digitally “adopt” a sheep. Their hoodies are one of a kind!
Our team oversees Sheep Inc. with great enthusiasm and believes in the continued success of this business. And we are glad that Sheep Inc. is a part of Flyer One Ventures portfolio.
Investment & PR Director
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