Fuel Ventures leads £1.5M seed round in Groov to transform embedded lending for SMEs

Fuel Ventures, a prominent UK-based venture capital fund, has led a £1.5 million Seed funding round in Groov, a pioneering embedded lending platform focused on bridging the $1.2 trillion funding gap faced by small and medium-sized enterprises (SMEs). The funding will enable the company to expand its business and bring thousands of global suppliers of second-hand clothing to an online marketplace for the first time The series A round was led by HV Capital with participation from Andreesen Horowitz (a16z), Y Combinator. Prominent founders and operators from Shopify, Depop and Postmates have also invested. The round brings the company’s total funding raised to $20.4 million London, 12 November 2024: Fleek, a wholesale second-hand fashion marketplace, has raised $20.4 million in funding — a $14.8 million Series A and a $5.6 million seed round that it’s announcing for the first time today. The Series A funding round was led by HV Capital, with participation from Andreesen Horowitz (a16z) and Y Combinator. Founders and operators from prominent technology companies like Shopify’s President (Harley Finkelstein), Depop’s ex-CEO (Maria Raga), and Postmates’ CTO (Sean Plaice) have also invested. The previous seed round was led by a16z. Fleek was founded in November 2021 by Abhi Arora and Sanket Agarwal with a mission to enable entrepreneurs in the circular economy to make second-hand first choice. Abhi and Sanket identified one of the major barriers to growth for the second-hand clothing market was how difficult it is for businesses to source inventory - with the offline, global and very fragmented nature of the industry. The founders built a platform that would bring that offline USD 200 billion (as of 2023) industry online for the first time, to make it easier for retailers and wholesalers of second-hand clothing from around the world to transact with each other. The funds raised will allow the company to expand on this vision, by bringing on more suppliers from around the world to help resellers, retailers and even high street retail chains enter the second-hand apparel market through an easy-to-use online marketplace. On Fleek, buyers can access desirable second-hand inventory at profit-driving prices, all with net credit terms, full buyer protection and quality checks guaranteed, enabling businesses to scale their sourcing in a simplified and secure way. Fleek is doubling down on the platform's interactive social features like chat and live video shopping and enabling global payments and logistics to connect buyers and sellers globally. Fleek leverages AI and predictive analytics to forecast what’s selling in the second-hand industry, educates suppliers on these trends, and enables buyers to source across categories such as vintage streetwear, Y2K, and upcycled clothing in bulk. This allows them to capitalize on what is projected to be an industry that will grow three times faster than the overall apparel market by 2028, reaching an estimated $350 billion, all while helping to mitigate the significant environmental impact being created by fast fashion. Abhi Arora, co-founder and CEO of Fleek, said: “Our mission is clear: to make second-hand the first choice and elevate businesses on both sides of the marketplace. While we've made progress, the world we envision—where consumption patterns shift, and a new class of entrepreneurs emerges—is still being built. With this funding, we aim to get more businesses to start selling second-hand clothing and drive the shift toward sustainable shopping." Sanket Agarwal, cofounder of Fleek, said: “The way to bring this very offline industry online is to build a product that has a dynamic social experience, fostering connections through chat and live shopping, and enabling transactions via seamless global payments and logistics. By enabling this new wave of circular economy entrepreneurs around the world to interact directly with each other, we hope to enhance the global trade of used clothing more efficiently.” Felix Klühr, General Partner at HV Capital said: “We are proud to invest in Fleek, a company that is redefining the second-hand fashion landscape. Fleek’s innovative approach to scaling the second-hand market globally reflects tremendous potential for growth. The marketplace not only addresses current industry needs but also paves the way for a more sustainable future in fashion. We’re excited to be part of this journey.” Connie Chan, General Partner at Andreessen Horowitz (a16z) said: “We're thrilled to partner with Fleek - their vision of optimizing the second-hand supply chain and simplifying inventory replenishment for resellers and retailers is impressive. We believe Fleek will bring untapped supply online, fostering trust in the ecosystem and significantly growing the wholesale market. Especially with the new Reworks business line, Fleek is well-positioned to serve a brand new generation of online and offline sellers.” Today, Fleek has empowered 10k+ resellers and retailers from 70 countries to source 2.5million items of clothing from 1k+ wholesale suppliers worldwide. Fleek has offices in the UK, Pakistan and India.

Fuel Ventures, a prominent UK-based venture capital fund, has led a £1.5 million Seed funding round in Groov, a pioneering embedded lending platform focused on bridging the $1.2 trillion funding gap faced by small and medium-sized enterprises (SMEs).

Groov’s innovative Embedded Lending 2.0 platform empowers B2B SaaS providers to integrate lending solutions directly into their user experiences, offering SMEs seamless access to capital precisely when they need it.

The funding, which also included support from Aperture and industry-focused angel investors, will help Groov expand its product offerings and scale its presence across key markets. This investment aligns with Fuel Ventures’ dedication to supporting transformative fintech companies that address critical business needs and drive sectoral innovation.

Groov’s lender-agnostic model connects SMEs with a diverse range of capital providers, ensuring flexible financing options with competitive terms and higher approval rates. By integrating capital solutions directly into B2B SaaS platforms, Groov enables businesses to access the funds they need for stock purchases, marketing, invoicing, and more, without leaving their chosen platform.

Mark Pearson, Founder of Fuel Ventures, expressed his enthusiasm for the investment, stating, “When speaking to Mark Hazzard and Rakesh Jena, we immediately saw they were onto something special. Their bold approach to innovating the SME capital space aligns with our commitment to backing visionary fintech solutions.”

Groov CEO Mark Hazzard shared his excitement, commenting, “This investment from Fuel Ventures and our other investors is a strong validation of our mission to empower SMEs with capital on their terms. We’re excited to grow our platform and bring our vision to life.”

With Fuel Ventures’ backing, Groov is well-positioned to drive significant advancements in SME financing, ultimately helping to bridge the funding gap and support business growth worldwide.


Jamie Young

Jamie Young

Jamie is a seasoned business journalist and Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting. Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops to stay at the forefront of emerging trends. When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs, sharing their wealth of knowledge to inspire the next generation of business leaders.
Jamie Young

https://bmmagazine.co.uk/

Jamie is a seasoned business journalist and Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting. Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops to stay at the forefront of emerging trends. When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs, sharing their wealth of knowledge to inspire the next generation of business leaders.