How Two Friends Turned A Gobi Adventure Into A Cashmere Empire

In 2013, college buddies Matt Scanlan and Diederik Rijsemus took an adventurous trip to Mongolia, which turned into a groundbreaking business venture.

Stranded among goat herders in the Gobi Desert, they uncovered the potential for revolutionizing the cashmere industry.

Their idea was simple yet innovative: buy cashmere wool directly from the herders, eliminating costly middlemen, to produce affordable luxury cashmere products.

This marked the birth of Naadam, a brand that has since redefined the cashmere market.

Without prior experience in the fashion industry or sufficient funds, the duo embarked on a bold journey.

In 2015, leveraging a $2.5 million loan secured by Scanlan's parents' home, they purchased 50 tons of cashmere wool, laying the foundation for Naadam's success.

By 2022, the company celebrated $100 million in revenue, offering a range of products from its signature $98 sweater to various cashmere items.

Naadam is sold through online platforms, luxury retailers such as Saks Fifth Avenue, and its stores in New York and Los Angeles, reported CNBC. 

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The journey from a risky desert deal to a thriving business was uncertain. Early on, Scanlan, now CEO, faced daunting challenges, including repaying the initial loan.

Through strategic decisions, such as selling most of the first batch of yarn to cover their debts and using the remainder to produce high-quality sweaters, Naadam began to carve its niche in the market.

A pivotal moment came in 2018 when a three-minute video detailing their Mongolian adventure and business ethos went viral, garnering over 35 million views.

“That video defined Naadam’s success for a long, long time,” Scanlan said. “It probably is still the best advertisement we have for who we are and what we’re about.” 

This exposure, coupled with more than $50 million in funding from investors such as Vanterra Capital, propelled Naadam to new heights.

Yet, Scanlan attributes a significant part of their success to luck and the right timing.

Naadam's business model challenges the traditional cashmere industry by offering high-quality, affordable products while ensuring fair compensation for Mongolian herders.

“You can have a great business plan, but if you don’t have a little bit of luck and opportunity on your side, it kind of doesn’t matter,” Scanlan added. “Every major inflection point that we’ve had along the way, we’re just at the right time, right place.”

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This story is part of a series of features on the subject of success, Benzinga Inspire.

How can you invest in early-stage startups if you don’t know the founders? Easy. Click here for a list of startups you can invest in today.

Benzinga may receive monetary compensation from the issuer, or its agency, for publicizing the offering of the issuer’s securities in this article. Please see 17b disclosure linked in the offering circular for more information.

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo: Shutterstock

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