Calico has raised $2.6 million CAD ($2 million USD) to help direct-to-consumer (D2C) fashion brands improve their supply chain operations.
Kathleen Chan, Calico’s founder and CEO, previously launched and scaled her own D2C jewelry and apparel companies, where she became familiar with the challenges associated with running a D2C brand’s supply chain activities.
According to Chan, this process involves a lot of manual labour and a range of different, “siloed” tools, which can result in expensive production errors and make it tough for brands to get new products to market quickly.
“This is a problem that I’ve seen [and] explored twice … I’m just building a tool I wish I had.”
-Kathleen Chan, Calico
When COVID-19 hit, exacerbating these issues and bringing the supply chain to the fore for consumers and investors alike, Chan decided to help other fast-growing D2C fashion brands tackle these problems with Toronto-based Calico.
“This is a problem that I’ve seen [and] explored twice,” Chan told BetaKit in an interview. “I’m just building a tool I wish I had.”
Calico’s all-equity seed round, which closed late last year, was led by Serena Ventures, the venture fund of tennis superstar Serena Williams. It also saw participation from San Francisco-based Maple VC and Hyphen Capital, Montréal’s Inovia Capital, Toronto-based Roach Capital, Slack CFO Allen Shim, Italic CEO Jeremy Lai, Ancestry CEO Deborah Liu, and a group of early Shopify employees that includes Software Development Manager Anthony Clark and former product lead Daniel Patricio.
Founded by Williams in 2014, Serena Ventures is a woman-led and operated San Francisco-based venture capital firm that focuses on underrepresented early-stage tech founders. The firm, which recently closed $111 million USD for its new fund, has a portfolio of 60 companies that includes MasterClass, Daily Harvest, and a variety of commerce firms.
“I’m excited to partner with this world-class team on their mission to help brands take back control of their supply chain,” said Williams, who serves as the managing partner at Serena Ventures. “From running my own brand, I have experienced the exact problem Calico is solving.”
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Chan founded Calico in October 2020. The startup has raised a total of approximately $2.8 million CAD ($2.15 million USD) to date, including some previously unannounced pre-seed funding from San Francisco’s Forum Ventures.
According to Chan, in the supply chain tech space, there are “a lot of legacy [tech] tools” that serve retail giants but do a poor job of servicing smaller brands. On top of that, “the slew of competitors is very siloed,” as most operators in this space focus on a single product or facet of the e-commerce workflow, Chan noted.
“There’s a lot of fast-growing [e-commerce] businesses that were still using this combination of solutions,” said Chan. “I searched high and low for something more tailored to our space, but, I mean, Asana can only go so far.”
Enter Calico, which describes itself as “everything e-commerce brands need before their products get on Shopify and Stripe.” Through the company’s artificial intelligence (AI)-powered platform and network of vetted factory partners, Calico hopes to simplify the supply chain operations of D2C brands.
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“What Calico is doing very differently here is really starting up on that workflow from the product conception, development stage, all the way until the product is ready to be picked up by your freight forwarder on your factory floor,” said Chan.
Calico is part of a wave of Canadian tech companies tackling supply chain issues that have raised funding in recent months, a group that includes TealBook, Notch, Axya, and aDolus.
According to Chan, supply chain tech “has not been very sexy for so long,” but it’s “finally the right time” for a solution like Calico. “There’s a focus on supply chain technology now,” said Chan. “After COVID, people are seeing how important that is. It’s not just about not getting toilet paper.”
Chan said Calico initially sought to raise a smaller amount, but ended up taking in more capital after seeing strong investor interest in the company’s supply chain solution. “We’re solving a very real problem that plagues a lot of brands every day,” said Chan, citing the size of Calico’s market opportunity and her past experience as contributing factors to the round’s oversubscription.
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Prior to launching Calico, Chan built D2C jewelry brand Finley and corporate apparel brand Brooklin Supply. Chan views the support of Williams and Serena Ventures as a big help, given that Williams has her own D2C fashion brand, S by Serena, and her firm’s “deep” e-commerce experience.
“They not only come from an experienced background, they know the nuance,” said Chan. “I think that’s very, very key, especially in this space, because you can’t be building something generic.”
Calico’s focus is on the D2C fashion space, which includes apparel and accessories. Most of its brand customers are based in North America, who work with international manufacturers that are scattered across the world.
“There’s a focus on supply chain technology now … It’s not just about not getting toilet paper.”
-Kathleen Chan, Calico
Today marks Calico’s public launch. So far, Chan said the startup has seen “outsized demand” since it began actively selling its solution during the fourth quarter of 2021, amassing a customer base that ranges from emerging D2C brands to multi-million dollar retail companies.
The startup plans to invest the proceeds from its latest round in customer acquisition and product development, as it looks to add more e-commerce and accounting integrations.
“We’re not trying to be another siloed solution,” said Chan. “We’re really trying to build that flow of data across the board. And to do that, you need integration.”
In recent months, Calico has begun building out its team with the addition of Swyft alum Michael Cheung as director of sales and Aldo alum Nicolas Finlayson as its head of supply chain.
Feature image of Kathleen Chan, courtesy Calico.