[Update] STCH Raises $5.5 Mn To Build AI-Led Fabric R&D, Manufacturing Platform

Update | April 23, 2026, 13:10 IST

Hours after the story was published, STCH issued a revised statement saying it raised $5.5 Mn in the round, not $7 Mn as communicated by it earlier.

AI startup STCH has raised $7 Mn (about ₹66 Cr) in its Pre-Series A funding round led by Omnivore, along with participation from Kae Capital and WVC. 

The startup, which offers a contract development and manufacturing platform (CDMO) to fashion businesses, intends to use the fresh capital to expand its AI capabilities, build out its fabric R&D lab, deepen manufacturing partnerships, and scale delivery across key markets. 

Founded in 2025 by ex-Zetwerk executives Narahari Payala and Aseem Chitkara, STCH is building an AI-based CDMO platform focused on fabric innovation and textile manufacturing.

While most AI innovation in fashion has focused on the consumer side, such as design tools and virtual try-ons, STCH is targeting the backend, specifically fabric development and sourcing.

STCH’s CDMO platform analyses the product images and descriptions to decipher the fabrics used by global fashion brands in their products. The system then breaks down fabrics across parameters like texture, weight and finish, and then helps recreate similar fabrics using local manufacturing.

For instance, Payala claims that the startup has developed cotton-based fabrics that mimic the look and feel of polyester, allowing brands to move towards more sustainable materials without compromising quality. The startup can take a fabric from concept to production in about 45 days.

It works closely with brands, especially in the UK and Europe, to show fabric samples and prototypes regularly. It then manufactures these fabrics via a network of partner factories across India and Bangladesh.

Unlike traditional manufacturers, STCH operates with committed capacity from factories rather than owning them. It currently works with a handful of factories whose production capacity is largely dedicated to fulfilling its orders.

The idea for STCH came from the founders’ experience in textile manufacturing and global sourcing. Payala felt that most innovation in fashion was happening on the consumer side, while the manufacturing layer remained largely unchanged. 

However, the trigger came from a real customer problem. A UK-based brand approached the team to replace fabrics it was sourcing from Turkey with alternatives from India. 

It took STCH a few months to recreate those fabrics, but the brand was able to cut sourcing costs by nearly 20%. This became the starting point for building a more structured fabric R&D and manufacturing model.

From there, the founders began focusing on using AI to understand what fabrics are trending globally and recreate them faster and cheaper via India-based manufacturing.

The broader goal, according to Payala, is to build intelligence around fabric “recipes” and reduce the time it takes to go from identifying a trend to delivering finished fabric at scale.

STCH is building an internal dataset of fabric “recipes”, which essentially are combinations of fibres, processes and treatments. 

The startup is also working on tools to analyse a brand’s historical design and fabric data to better predict what products it is likely to need.

Currently, the UK is STCH’s largest market, followed by India and parts of Europe. The startup plans to expand further into Germany, France and Spain, and later the US.

STCH expects to close about $15 Mn of its current order book in the next year and is targeting revenue of around ₹100 Cr in FY27.

The startup is also betting on favourable macro trends. Recent trade agreements between India and markets like the UK and Europe, along with shifting tariff structures, are making Indian textile manufacturing more competitive globally.

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