Modern Indian wear brand Alaya By Stage3 has announced that it has raised an undisclosed seed round led by LC Nueva AIF with participation from a Delhi-based HNI. The round was advised by Brightbridge Advisors, who acted as the Investment Bankers for the transaction.

The capital will be deployed to expand operational capacity, strengthen supply chain capabilities, and deepen the integration of AI across the business ahead of peak festive demand.

Operated by Cosmo Brands, the company has seen rapid growth over the past two years and is currently on track to reach Rs 20 crore in annual recurring revenue and aims to touch an ARR of Rs 50 crore within the next two years, supported by investments in infrastructure, efficiency, and AI-led automation.

Alaya By Stage3 operates in India’s fast-growing ethnic wear market, which continues to benefit from rising discretionary spending, social media-driven fashion trends, and renewed consumer interest in cultural apparel. The brand focuses on bridging the gap between premium designer offerings and unorganized low-quality alternatives by delivering design-led ethnic wear at accessible price points.

The company said the fresh capital will be used to expand its warehousing infrastructure, scale inventory and production, and strengthen its supply chain to support new collections and product lines. A meaningful portion of the funding will also be allocated toward embedding AI models and adding AI layers across business processes from demand forecasting and inventory planning to marketing, customer experience, and creative workflows - to improve efficiency, reduce costs, and enable faster decision-making.

Co-founder and CEO Himanshi Kamra said, “The fundraise is aimed at addressing operational constraints that have emerged alongside strong demand. We are seeing significant traction, particularly during festive seasons, and hence require deeper inventory and stronger backend infrastructure to sustain growth while moving toward profitability. At the same time, we are actively embedding AI models and adding intelligent layers across our business - from design and merchandising to marketing and supply chain, to run a leaner, sharper, and more scalable organization as we grow.”

To this, Co-founder and Chief Business Officer Jatin Grover added, “We have built a strong product-market fit in the design-led ethnic wear segment, and now we want to focus on scaling execution by removing any logistics and supply chain bottlenecks. AI is central to how we are rethinking our operating model. We are using it to sharpen performance marketing, improve planning accuracy, and build workflows that would otherwise require much larger teams.”

Grover said the company is aiming to build a Rs 50 crore ARR business over the next two years and plans to raise a larger institutional round later this year.

Founded as a digital-first brand, Alaya By Stage3 sells through its own website and online marketplaces, including Nykaa Fashion and Amazon. The company has expanded its presence beyond India and now serves customers across five international markets.

It has also diversified its product portfolio with the launch of Alaya Kids, a children’s ethnic wear line, as part of its strategy to build a broader lifestyle brand.

The company operates in a highly competitive segment with a large presence of unorganized players and established brands. It also faces challenges related to demand seasonality and the need for continuous design innovation. However, it expects its digital-first approach, design sensibility, and AI-led operating model to provide a sustainable advantage.

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“Alaya by Stage3 has demonstrated strong growth while maintaining capital efficiency. The team’s ability to scale revenue more than five times in two years, combined with their thoughtful adoption of AI across the business, reflects a clear understanding of the consumer market and disciplined execution,” said the Delhi-based angel investor.

Anukul from Brightbridge said "The Indian ethnic wear market is growing fast, and Alaya is in the right place at the right time. They have built a brand that offers great design without the high price tag, and the founders have executed really well. The funding gives them a solid base to grow further. We are excited to see them hit Rs 50 crore ARR and expand Alaya into a true lifestyle brand."

In the future, the company plans to deepen its presence in existing markets while expanding into new geographies. It will also continue to invest in new collections and product categories, alongside backend improvements and AI-driven efficiencies to enhance margins.

Alaya By Stage3 is headquartered in Gurugram and positions itself as a contemporary, AI-enabled ethnic wear brand for modern Indian consumers, combining traditional aesthetics with current fashion trends at accessible price points.