Star-powered Phygital Fashion Start-up Hits Investor Funding

London-based “phygital” fashion house Xtended Identity, who counts famous figures like Grimes, Bad Bunny, Megan Thee Stallion, Erykah Badu and Ive as clients and Thierry Mugler as collab partner, is dipping a toe in the fundraising pool with a new $400,000 pre-seed round led by J-Cube Ltd, founder Xing Yunjia told WWD.

That may not be a staggering amount, but it marks an important milestone for the scrappy, three-year-old virtual fashion start-up. The business aims to hit it big with physical-plus-digital goods, which seems more likely since it was discovered by Grimes, the singer, visual artist and ex-girlfriend of Elon Musk.

“Really, at our beginning, we were building everything based on the internet. So we were trying to post our work in building the digital fashion … and collaborate with some influencers to build organic steam from social media,” she recounted. “Grimes was the first celebrity who reached out to us. She was amazed by our digital fashion world pieces, and she wanted to be the first celebrity to wear it.”

The April 2023 edition of Cybr magazine featured Grimes wearing original looks by Xtended Identity, in a surreal series of artwork that was based on a real-world photoshoot with physical pieces. Another magazine cover, this time in Rolling Stone, spotlighted Bad Bunny in the tech fashion brand’s twisted metal accessories in the July/August 2023 issue. Rolling Stone is owned by the same parent company as WWD, Penske Media Corp.

In short order, the brand was hit up by stars like Megan Thee Stallion, Erykah Badu and K-pop group Ive. Then it clinched a collaboration with Mugler on its first digital fashion project — an augmented reality filter for Instagram highlighting its Alien Goddess Supra Florale fragrance.

Now, Yunjia is in conversation with other chart-topping, A-list musical performers, while working on another project — a Pride Month collaboration with drag queen community figures slated for June.

Today, her priority goes beyond flights of digital fancy. That’s not a creative choice as much as a business decision.

According to Yunjia, when the company polled consumers, it found strong sentiment against purchasing digital fashion. “They don’t feel their ownership,” she explained. “They feel like digital fashion should be free, it should [fly across] social media.” Notably, Xtended Identity has previously dabbled with different models, from digital fashion rentals to NFTs, primarily around AR fashion that layers digital looks over people’s selfies.

Now she wants to expand development using powerful tools like Apple’s AR development kit, which is capable of sophisticated rendering that doesn’t rely on online connectivity. “When the customer sees that quality, sees that they own this kind of AR asset in their phone or their Apple Vision Pro, they will feel like, ‘Oh, OK, I own that virtual fashion,’” she said.

Of course, that sense of ownership extends to real-world goods. Now the business is all in on phygital fashion as well.

The hybrid offerings blend digital with physical items, which in Yunjia’s mind translates to luxury products. That’s something she knows a thing or two about.

The entrepreneur started out in fashion as an intern at Louis Vuitton in China before going on to work at Giada, the Italian luxury house that was acquired by Redstone Haute Couture in Shenzhen in 2011. Her trajectory also took her to a job interview at Alexander McQueen. She didn’t end up working there, but her bevy of ideas prompted the recruiter to ask, “Why don’t you start your own business?” Yunjia recalled, laughing.