The cofounder of underwear startup Parade on why the era of Victoria’s Secret is over
This is an installment of Startup Year One, a special series of interviews with startup founders about the major lessons they have learned in the immediate aftermath of their businesses’ first year of operation.
Cami Téllez, 22, has been working in startups and venture capital since she was 17. While studying English and art history at Columbia University in New York City, Téllez met Jack DeFuria in the local tech scene, and the two decided to go into business together. Téllez dropped out of Columbia in January 2020 to work on her latest venture, underwear brand Parade, full-time.
“As two 22-year-olds, we were both drawn to brands that have a cultural impact for Gen Z,” says Téllez. “Parade is a bold and expressive brand that’s seeking to rewrite the American underwear story.”
“Cami so innately understands the Gen Z consumer,” says Neil Blumenthal, cofounder and co-CEO of Warby Parker and an investor in Parade. “By building a value brand with a bold commitment to community, I see a future where Parade is the go-to underwear brand for all women. I’m excited to be along for the ride.”
Fortune recently spoke with cofounder and CEO Téllez about how the first few months are going and what the company plans to do next.
The following interview has been condensed and lightly edited for clarity.
Fortune: From ThirdLove to Everlane, smaller and independent retailers have really revolutionized the market for undergarments, effectively forcing legacy brands like Victoria’s Secret to completely rethink not only what they sell but how they sell it. What inspired the launch of Parade? What makes it stand out?
Téllez: Jack and I really believe that brands are powerful when they write cultural scripts. I grew up going to the mall, going to Victoria’s Secret, trying on those add-two-cups bras. The days of Victoria’s Secret’s cultural script have come to an end, and now, the whole category is in crisis.
We felt that underwear had this massive untapped potential, and it was time for a new brand to come and rewrite the American underwear story by standing for social good, sustainability, and believing that underwear at its core is about sexiness, not self-expression.
Retailers have taken quite a hit during the pandemic. But Parade just surpassed a huge milestone in selling 500,000 pairs of underwear within the first year. What has it been like running a direct-to-consumer clothing business in this economic climate? What has it been like to work with supply chain partners and develop the initial collection?
[The majority] of women’s underwear in the U.S. is sold offline because this market is still owned by a few massive conglomerates. When quarantine happened, Parade’s rate of growth increased because we were perfectly positioned as an online value brand.
During economic downturns, people want to vote with their dollars more than ever. Our strong community of thousands of ambassadors and customers ensured that we didn’t just weather the storm, we came out stronger. Our revenue increased over 500% since the start of the year, and we have a clear path to profitability mid–next year.
That said, what has it been like to secure funding for Parade? Is it primarily self-funded, VC-backed, or some mixture of both?
We’ve raised a total of $8 million in funding since launching in October 2019. We’re backed by some of the best consumer investors in the world, including Lerer Hippeau, Greycroft, Cassius, and Vice Ventures. We’re also backed by many of the founders of “generation one of direct-to-consumer,” including the founders of Bonobos, Away, Warby Parker, and Casper. We’re lucky to have a team of investors and operators backing Parade that believe the best people to create a company for Generation Z is Gen Z themselves.
Parade is also now expanding with a limited collection of scarves. Why scarves, in particular, and will Parade be expanding to more clothing products in the future?
Parade is on its path to becoming a full-stack underwear company. We’re lucky to have some of the very best product talent in the world from Lululemon, Adidas, and Nike working with me to reimagine the experience of skin-contact clothes through sustainable fabric innovation and dynamic design. We’ll be expanding to three new, much-awaited categories next year. We don’t just want to own her underwear bottoms; we want to own the entire drawer, from the underwear she sleeps in and sweats in to her lingerie.
Post-pandemic and five years down the road, where do you see Parade in the market?
Our thousands of ambassadors and hundreds of thousands of customers cocreated the fabric of Parade, and they serve as feedback and inspiration for where we’re going next as we stay in the vanguard of the category. It’s easy to build a brand that’s relevant for two or three years, but to make Parade a brand that’s culturally important for 10 years we know begins and ends with listening to our community.
More must-read lifestyle coverage from Fortune:
- The irreverent toilet paper startup that cleaned up during the pandemic lockdown
- Should you renew your travel credit card for 2021?
- How to utilize your frequent-flier miles this year even if you’re not buying plane tickets
- A reading list for the 2020 presidential election from the New York Public Library
- Telling men’s stories through their cars