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Mumbai-based lifestyle and fan merchandise startup The Souled Store has raised Rs 135 crore ($16.4 million approximately) in a Series C round led by Xponentia Capital Partners with participation from returning investors Elevation Capital and RPSG Capital. This marks Xponentia Capital’s largest investment in the consumer sector.

The company will use the capital to expand into new categories and plans to launch over 100 stores across the country in the next two years.

The Souled Store will also offer a 100% buyback of vested employee shares as part of its ESOP (Employee Stock Ownership Plan) programme. 

“We will be buying all the vested ESOPs as we want to make a habit of it. We have been selective about whom we have allotted ESOPs to and we would like our employees to see value in it,” Vedang Patel, Co-founder at The Souled Store told YourStory. He did not disclose the size of the ESOP buyback. 

As of May last year, the company had allocated 3.7% shares to its ESOP plan according to data platform Tracxn, at an unrealised value of Rs 29.7 crore. 

It currently has 12 stores across five cities and has already added sneakers and kidswear to its offerings, besides fan merchandise apparel for the target group of 18-32-year-olds. 

“Of the 12 stores, eight were opened last year. Our stores take a maximum of two to three months to recover the capex. We have stores in Bengaluru, Pune, Gurugram, Mumbai, and Indore,” said Patel.

The idea for offline expansion for its first store in Mumbai came when the startup realised the cost of outdoor billboard advertising at Bandra was as high as renting out a physical store, according to Patel.

The Souled Store was founded in 2013 by Patel, along with Rohin Samtaney, Aditya Sharma, and Harsh Lal. Since then it raised nearly $13.1 million in funding, according to data from Tracxn. Actor Sara Ali Khan—who invested in the startup in March 2022—is its brand ambassador.

“The Souled Store has established a distinctive brand and is in the process of creating a large community that identifies and relates with its casual wear products,” said PR Srinivasan, Managing Partner at Xponentia Capital, in a statement. 

He added, “We look forward to supporting Vedang and his team as The Souled Store continues to innovate and delight its customers.”

The Souled Store claims to receive nearly 70% of orders through its own website, followed by 15% from other online marketplaces and the rest from its stores. “We have built a sticky, repeatable customer base and our repeat rates are as high as 90% in six months. We have managed to crack this as most direct-to-consumer brands rely on online marketplaces for almost 80% of their orders,” Patel told YourStory. 

The Mumbai-based startup currently claims to be at an annualised revenue of Rs 450 crore in terms of Gross Merchandise Value (the total value of goods sold over a period of time by an online platform). It clocked losses of $2.8 million for fiscal 2021, according to Tracxn. It competes with the likes of Planet SuperHeroes owned by Nodwin Gaming.