When people think of the fashion industry, “sustainable” or “ethical” are likely not the first words that come to mind. wearwell, a clothing-subscription start-up based in Philadelphia that offers only ethically-sourced clothing, aims to change the narrative through championing sustainable practices. Sustainable (or ethical) fashion takes into account the full lifecycle of clothing, and aims as much as possible to reduce harm to the environment, the workers producing the clothing, and the consumers who purchase it.
After conducting rigorous research on wearwell, the student team at Wharton Impact Venture Associates (WIVA) was thrilled to see an impact investment deal with the start-up go live on the crowdfunding platform Republic.
The Industry Issue
The fashion industry produces a staggering 10% of global carbon emissions and is the second-largest consumer of the world’s water supply, while also contributing significantly to microplastic pollution in the oceans. Beyond the environmental aspect, the sector has also faced ethical problems around employee rights and working conditions. The 2013 factory collapse in Dhaka, Bangladesh provided a much-needed wake-up call to the sector.
Given these realities, demand for more socially and environmentally conscious fashion is growing rapidly: online searches for sustainable fashion increased three-fold between 2016 and 2019. But in an era of “greenwashing,” being a conscious consumer can be challenging. Navigating complex certifications and verifying supply chains can make responsible shopping inaccessible and confusing.
Investing in Sustainable Fashion
Enter wearwell. Co-founders Erin Houston and Emily Kenney met while pursuing master’s degrees in International Development at American University. Both have backgrounds in brand management, impact measurement, and sustainability.
Through providing curated selections from authenticated brands, wearwell gives consumers access to socially responsible brands in a straightforward way. Their verification process dives into regulations and certifications, covering areas such as worker benefits, upcycled material use, and manufacturing waste. Working with their brands, wearwell prioritizes the quantification of environmental and social impact for improved transparency throughout the supply chain.
Exemplifying the interdisciplinary culture of WIVA, this impact investment opportunity was sourced and executed by Penn Medicine student Karan Naik, PSOM’22 and Wharton student Katie Ardiff, WG’21. “When assessing social impact, the environmental and ethical implications of the fashion industry are undeniable. We were excited by wearwell’s data-driven commitment to identifying conscious brands and believe their brand trajectory offers promising opportunities for success,” they said.
“How you measure impact, and what standards you use, is an important question,” said Rajith Sebastian, director of special projects, impact investing at the Wharton Social Impact Initiative. “In clothing, many sustainability standards exist. What impressed us most was how the founders used these standards, and also their own expertise and studies of sustainable supply chains, community development, and social enterprise, to tailor-make more meaningful impact standards for wearwell.”
Houston and Kenney, the wearwell co-founders, were equally excited by the opportunity, “WIVA has been a tremendous team to connect with. They understand our impact as well as the way our target market is rapidly growing right now, with more consumers attuned to the ways their purchases affect both people and planet. We’re thrilled to have partnered with WIVA to advance wearwell’s growth.”
Check out wearwell and their seed campaign on the crowdfunding platform Republic.
— Karan Naik and Katie Ardiff
Neither the University of Pennsylvania, the Wharton School, Wharton Impact Venture Associates (WIVA), nor any of their respective students, faculty, directors, officers, employees, representatives, affiliates, or agents (collectively, the “Penn Parties”) (i) is acting as underwriter, broker-dealer, promoter, financial advisor, or other intermediary with respect to any offering of securities by any entity mentioned in this article, or (ii) has received or will receive any compensation from any person or entity as an incentive to publish of this article. In addition, the Penn Parties have not received and will not receive any compensation or other item of value in connection with any possible or future investment in any securities issued by any entity mentioned herein.
Any research or diligence described above (i) was performed by WIVA solely for its own, limited, educational purposes, and not for the purpose of aiding any person in making any investment decision, and (ii) may be limited and incomplete, by its very nature, as a result of limited publicly available information and other limited information voluntarily made available to WIVA. No Penn Party shall have any liability whatsoever arising from any error or incompleteness of fact or opinion in, or lack of care in the preparation or publication of, this article.
Copyright ©2022 the Wharton School. All rights reserved. The information, methodologies, data and opinions contained or reflected herein are proprietary of the Wharton School and/or its students, are intended for non-commercial use, and may not be copied, distributed or used in any way, including via citation, unless otherwise explicitly agreed in writing. They are provided for informational purposes only and (1) do not constitute investment or financial advice; (2) cannot be interpreted as an offer, indication, solicitation, or recommendation to buy or sell any securities or to undertake any kind of business transactions; (3) do not represent an assessment of any issuer’s economic performance, financial obligations nor of its creditworthiness; and (4) are not a substitute for a professional financial, legal, and tax advice.
Posted: June 24, 2020