Swedish fashion technology company Material Exchange has announced the closing of a EUR5m (US$6m) funding round to accelerate its growth plans.

The firm is driving the sustainable digital transformation of the fashion industry by creating transparency and improving communication between brands, material suppliers, and manufacturers. By streamlining supply chain processes, Material Exchange says it helps reduce the need for physical samples, material wastage, and therefore supports a more sustainable future. 

The company launched its platform a year ago and today works with almost 400 suppliers and 50 brands globally including Caleres, Bestseller Group, Deckers Brands, Global Brands Group, Camuto Group, and Ariat.

It says it is “one of the few lucky start-ups” that has benefited from the ‘new normal’ caused by the pandemic.

“Our business exploded overnight as the fashion industry realised that with global travel halted, textile fairs cancelled and employees forced to work remotely; – fashion brands, suppliers and manufacturers had a pressing need for a solution to source materials and manage relationships with suppliers in a completely digital environment,” says Darren Glenister, CEO of Material Exchange.

“The Covid-19 pandemic has accelerated the digitalisation of the industry by at least five years, we can’t afford to lose momentum, so have accelerated our fundraising plans in order to seize the opportunity and scale rapidly.” 

The financing round was led by Norrsken VC (Europe’s largest impact tech fund) and Partech. Other new investors joining the round included Day One and Lyra Ventures. Inventure, which led the company’s first financing round in November 2019, also participated.

Material Exchange recently partnered with the organisers of the Kingpins Shows to build a digital denim supply chain platform that will allow mills to showcase their textiles to brands and retailers year-round.