Payments platform Purple Dot has announced seed funding of £1.35 million, while promising to help fashion brands tackle wasted inventory and the profit erosion that comes with it.

The round was led by Connect Ventures, with support from AI Seed, Moxxie Ventures and Andy Chung and Philipp Moehring from AngelList, among others.

Purple Dot was founded in August 2019 by the founders of big data analytics platform Twizoo, which was acquired by Skyscanner in 2017.

The Purple Dot model allows consumers to request a “worth-the-wait” lower price, and retailers may then decide whether or not to release a product mid-season at a slightly reduced rate. Customers pay up-front and then wait to have the item confirmed, receiving a full refund if not.

The company is currently working with a variety of small boutiques across the country, and is “in discussions” with a number of UK and US High Street brands.

The first brand to partner with Purple Dot is menswear retailer SPOKE.

The platform allows retailers to choose to sell their products at a reduced price mid-season, rather than being forced into “panic sales” at the end of it. The full price remains in play all season, with it maintaining its value to the consumer when they don’t have time to wait and choose to pay the full price.

“Typically”, said Purple Dot, the “worth-the-wait price will not fall below a 10-20 per cent reduction from the recommended retail price. This can help reduce losses from end of season discounting, as outlet style discounting will often involve items being sold off at 60-80 per cent below the RRP mark."

Madeline Parra, CEO of Purple Dot, said: “When shopping online today customers can either pay the retail price or walk away. When they do walk away, the item goes through the discounting process, becomes unprofitable for the merchant and may go to landfill.

“This binary system isn’t working for anyone - the customer loses out on the item because it may go out of stock in their size before they attempt to purchase it again, and the merchant loses the sale. Purple Dot tackles this problem head on by providing a new way to shop, taking on unsustainable and unrelenting consumerism, poor pricing tactics and profit-crunching sales at the same time.”

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