28 November 2018 Courier Dec/Jan 2019

Thingtesting x Courier: Naadam cashmere

Courier columnist Jenny Gyllander reviews a sweater from Naadam, a company that wants to make cashmere both affordable and ethical.

The Pitch

  • Affordable cashmere 
  • £12m+ funding
  • Launched in New York, 2015
  • Testing ‘The Essential’ in white, £58 ($75) 
  • Instagram: @naadam.co 

The VC view 

Direct-to-consumer has never been a hotter topic in venture capital than it is now, and Naadam is probably one of the best case studies of what’s so attractive about it. 

The backstory: Naadam’s co-founders Matthew Scanlan and Diederik Rijsemus ended up living in the Mongolian desert for a month (it’s a long story). That’s where they  had their aha-moment, after befriending goat herders and observing how rigged the cashmere industry was. Middlemen were fixing the prices and the herders could barely get by. Instead of the herders selling cashmere via brokers via mills and via manufacturers, Naadam buys directly from them. Like others in the direct-to-consumer world, it’s cutting out the middlemen. 

By becoming the buyers themselves, Naadam is able to sell products to consumers for less while also paying the herders more. And because Naadam operates mainly online, it therefore owns every step of the value chain from raw material to customer interaction. 

Cashmere is a £3bn market globally. This is still relatively niche, but it’s also one of the fastest growing segments in the luxury space, estimated to be worth £6bn by 2020, with most growth coming from online. It’s a pretty solid market to do business in.

The consumer view

Naadam not only did a huge favour for the goat herders, but for consumers too, by lowering cost of this heavenly soft material. This fall, it launched a range of £58 unisex sweaters, and the quality is amazing. For me, best of all is the edgy positioning of this cashmere brand in what is, let’s say, a dusty and traditional segment. Alongside the new line, Naadam launched a radical campaign on the streets of New York featuring goats doing the deed and an even-cheekier tagline: ‘Sustainable cashmere, coming soon.’ Too radical for some cashmere wearers maybe, but the brand resonates with my millennial, sustainability obsessed persona. Naturally, Naadam is sponsoring a goat-breeding program in Mongolia – and for the first time for me, wearing cashmere is a statement of fairness, not just luxury.

Jenny Gyllander is an investor at Backed and founder of product-reviews Instagram account @thingtesting.