November 19, 2012, 9:19 AM

Online Clothing Retailer Betabrand Raises $6.5 Million

The online-only clothing retailer, which launched in August 2010, allows its customers and fans to participate in the creation and promotion of its products.

First, online clothing retailer Betabrand announced plans to protect your privates with TSA-thwarting scanner-proof underwear. Then it offered up a solution to Mark Zuckerberg hoodie haters on Wall Street with the launch of its executive pinstripe hoodie. Now it’s looking to bring more sasquatch sweaters and disco pants to its customers by raising a new $6.5 million funding round, led by Foundry Group.

San Francisco-based Betabrand has an interesting business model. The online-only clothing retailer, which launched in August 2010, allows its customers and fans to participate in the creation and promotion of its products. Good examples are its Disco Open Source Project, in which users can create their own specialty clothing using its disco fabric, and its Model Citizen program, in which customers submit their own photos modeling the clothing they’ve bought. In both cases, Betabrand allows its customers and fans to act as pro bono designers and also its biggest advocates.

The startup is also fast-moving, by fashion standards, designing and manufacturing two or three new products each week. With the funding, it plans to ramp that up further, expanding production to 5-10 new products each week. It also plans to expand the Model Citizen program, and seek out new ways that customers can become involved in the creation of new clothing lines.

Along with the most recent investment, Foundry Group managing director Jason Mendelson will be joining the company’s board. I chatted with Mendelson today about the investment, asking what he found interesting in Betabrand. He pointed out that Betabrand dovetails nicely with other investments that the firm has made, such as Makerbot, which is pushing forward the “maker” movement, as well as its investment in the Cheezburger network. At the heart of that investment is the idea of crowdsourcing content, so why not allow users to crowdsource clothing?

Foundry was also impressed with Betabrand’s plans to scale up production and the way that it has been able to perfect the manufacturing process for what are relatively niche articles of clothing. “They’ve really cracked the code to producing small batches of clothing,” Mendelson told me.

The new funding comes up on top of a $1.3 million Series A round led by O’Reilly Alpha Tech Ventures in April of last year. Betabrand now has 17 employees, but founder Chris Lindland told me by email that the company plans to double that by next summer.

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