Blockchain start-up Retraced: “We aim to prove transparency pays off”

The ascent of German blockchain start-up Retraced has been rapid:
Founded in October 2018, and just over a year later, the company won the
German Sustainability Prize 2019. During the pandemic year 2020, Retraced
was able to win over 40 fashion companies (including Armedangels, Boyish
Jeans and ErlichTextil) and started 2021 with raising one million euros in seed funding from European
VC firm Samaipata.

The money will be used to finance the technical development of
additional, user-friendly functions of the digital platform as well as the
acquisition of new fashion companies. FashionUnited spoke to Retraced
co-founder and CEO Lukas Pünder about the start-up’s future plans, the year
2020 and the development of the fashion industry.

Lukas, we already spoke in an interview in December 2019.
Back then, you still
had the feeling that the reception of Retraced in the industry was a bit
hesitant, as transparency was still a “nice to have” and you had a lot of
convincing to do. More than a year and a pandemic later, the situation is
certainly different.

Foto: Retraced founders Philip Mayer, Peter Merkert and Lukas Pünder
at the Blockchain Summit in February 2019

That is correct. Back then, we often had to explain how a brand can
communicate transparency to the consumer and thus create trust and how this
also pays off economically. But that is actually only the second step. In a
first step, companies work on internal transparency, define it for
themselves as a brand and apply it to their supply chain, compliance and
sustainability efforts. Digital sustainability management includes defining
catalogues of requirements, for example that all suppliers must sign a Code
of Conduct, pay fair wages, etc. This is recorded and one can see
immediately how much was achieved.

About half of the 40 companies use our platform internally in this way,
and then communicate this to their customers in the second step. First you
have to clean up internally. In the meantime, however, transparency is a
must-have, as the responsibility for brands and thus their demands are

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Has the Corona pandemic made your work harder?

Transparency and sustainability are still really important issues in
fashion. You can see that many brands want to work on this. However, you
also notice that many brands have economic difficulties because of Corona
that prevent them from working intensively on transparency or

There were certainly many ups and downs last year. The lockdown in
April/May/June was more difficult, as it caught many brands and retailers
quite unprepared. We work a lot with young brands, from start-up to
start-up; brands that already rely on digitalisation and thus had fewer
problems during the crisis than traditional retail, for example. But retail
brands are in touch with us too; they want to learn about transparency and
apply it to their own issues.

For the customers who already rely on transparency, Covid-19 did not
change much. They knew where they were producing, were able to ask the
supplier directly
and adjust deliveries accordingly. They were also able to address supplier
needs, such as a reduction in production capacity due to labour shortages
and lockdowns. Nevertheless, there were hardly any delivery problems
because they were able to communicate. We have also noticed this with our
own brand Cano. Last year, for example, we already ordered the summer
collection in September because we knew that capacities had been reduced
and that production would therefore take longer. So there was planning
security on both sides.

In our last conversation, you also had to struggle a bit with the fact
that not all industry players want to disclose their sources – for example,
their manufacturers. Is that still the case?

There’s always a lot of secretiveness, but now companies also see the
advantage of sharing information and experiences with suppliers with each
other. For example, we have three customers who use the same supplier in
Turkey, and the exchange of information makes processes faster and more
efficient, because the supplier doesn’t have to say everything three times,
for example, but everyone can communicate centrally via the platform. These
are simply wonderful synergies. We create value not only for the brands,
but also for the suppliers. Our goal is to create a network between the
individual companies and, in the future, to also include certifying

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Moreover, for large companies with large order volumes, it is not a
secret where they produce, as there are not many factories in the world
that can meet certain volume requirements. Moreover, at least in the first
step, the information does not have to be shared with the end consumer. We
definitely want to make sure that if someone benefits, others can benefit
too, and we have found sustainability managers to be very cooperative about

Are there concrete case studies? Companies that have benefited from
more transparency?

Absolutely. For one, there is Boyish Jeans in Los Angeles. The brand for
sustainable women’s jeans wanted to find out, for example, where their
organic cotton comes from. We helped them track the entire journey – from
the fabric supplier to the yarn manufacturer. Everyone was cooperative and
transaction certificates can be used to prove when and what kind of
quantities were ordered and delivered. This was then passed on to consumers
and it was interesting to see how they dealt with the information: The
conversion rate from click to sale increased by 100 percent, from 6 to 12

Another example is Erlich Textil: The sustainable German fashion label
wanted to better understand its sustainability management, i.e. define
requirements, streamline processes and see to what extent suppliers fulfil
the requirements. This revealed which changes the company needed to make in
order to save time and manpower.

Does it happen that suppliers do not meet the requirements and that has

Almost every company has to change, that is, remove suppliers from their
supply chain. Almost every brand draws consequences if suppliers do not
meet the requirements or do not disclose enough information. Suppliers will
find that if they are not transparent and do not disclose raw material
sources, for example, certain clients will not accept that and will stop
using them. This also makes suppliers start to rethink too.

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Keyword supply chain: What does Retraced think about the new German
Supply Chain Law?

This is certainly a great first step. Germany has established itself as
a pioneer and set an example. You can see that the companies are taking it
seriously now that they have received this signalling effect from the
state. This is certainly a good first step. Smaller brands are also taking
the issue seriously now, the benchmark is rising and they don’t want to be
left behind, even if they are not affected by the law at the moment. Of
course, it should have gone deeper into the supply chain, but changes and
adjustments will surely follow.

Last but not least we want to know of course what happens next at
Retraced after the seed funding of one million euros?

Yes, it was a good confirmation for us that we are on the right track
and that someone like Samaipata sees value in what we are doing.
Internally, this means planning security for the next one and a half years.

With the money, we want to recruit more brands, start several projects
and expand the team. For example, we are currently working with five or six
brands at the same time; this would not be possible with a smaller team. We
will also develop new exciting features together with the brands and
continue to work on the platform. These will help brands make better
decisions based on real data from the supply chains.

Transparency certainly means having the right data available at the right
moment and bringing responsibility on board. Producing better quality,
setting up better processes and finding out where bottlenecks are and
transferring the information from the sustainable to the commercial sector.
Our task as Retraced is to show that transparency also pays off

This translated article was originally published on

Fotos: courtesy of Retraced


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