Secures Funding of $60 Million for Good Fashion Fund 2.0 by FOUNT
**Good Fashion Fund 2.0 Aims to Accelerate Sustainable Fashion Transformation**
The Good Fashion Fund 2.0 (GFF 2.0) is a new fashion fund developed by Dutch impact investment firm FOUNT, in partnership with Fashion for Good. The aim of the fund is to accelerate the transformation of the fashion industry towards sustainable practices, particularly focusing on circularity, resource efficiency, and reduced environmental impact.
The fund will provide non-dilutive and subordinated risk capital, also known as mezzanine financing, to small and medium-sized companies in the textile and fashion supply chains. This type of financing, which can be either convertible debt or preference shares, is riskier in nature but could potentially lead to higher returns.
The geographical scope of GFF 2.0 is expected to focus on emerging markets, particularly in Asia, such as India, Bangladesh, Vietnam, and Turkey. This focus is based on the prior fund's investments, although the official scope for the new fund has not yet been detailed.
The development of GFF 2.0 has been supported by a grant from the Catalytic Climate Finance Facility (CC Facility). The aim behind the use of mezzanine financing in GFF 2.0 is to increase financial additionality and unlock more private sector investment.
In addition to its financial support, GFF 2.0 will work closely with companies, offering advice on their strategy and sustainability, and improving their own governance. The fund will also build capacity through a technical assistance facility, focused on environmental, social, and regulatory compliance, as well as gender equity.
The proposition for fashion brands is that GFF 2.0 will invest in their key suppliers to accelerate their sustainability ambitions, in return for longer term offtake agreements, responsible purchasing practices, and strong commitments to environmental and social dimensions. The fund will also invest in companies within the supply chains of brands that are members of the Fair Wear Foundation.
FOUNT's investment lead for the Good Fashion Fund, Jayanth Kashyap, stated that the grant will help speed up the development activities of GFF 2.0. The fund is aiming for a target size of $60m, and it will apply both climate and gender lenses to all investments, promoting fair and ethical labor conditions for workers, especially women.
For more precise details on the official goals and geographic focus of Good Fashion Fund 2.0, monitoring announcements from FOUNT or Fashion for Good would be advisable as the fund is still in development.
- The Good Fashion Fund 2.0 (GFF 2.0) aims to promote financial inclusion by providing mezzanine financing to small and medium-sized companies in the textile and fashion supply chains, helping to accelerate the transformation of the fashion industry and contribute to climate-change mitigation.
- This blended finance approach, supported by a grant from the Catalytic Climate Finance Facility (CC Facility), aims to increase financial additionality and unlock more private sector investment in the fashion industry, particularly in emerging markets including India, Bangladesh, Vietnam, and Turkey.
- The fund is not only focusing on financial support, but also offers advice on strategy and sustainability, as well as building capacity through a technical assistance facility that focuses on environmental, social, and regulatory compliance. This will lead to improvements in environmental science and governance for participating companies.
- Investing in the Good Fashion Fund 2.0 is a unique opportunity for fashion brands, as it investments in key suppliers will help them accelerate their sustainability ambitions in exchange for longer-term offtake agreements, responsible purchasing practices, and strong commitments to environmental and social dimensions.
- By applying both climate and gender lenses to all investments, the fund aims to promote fair and ethical labor conditions for workers, especially women, in fashion-and-beauty businesses, contributing positively to lifestyle changes and improving the overall sustainability of the fashion industry.
