Rebag Secures New Capital for Innovation | Luxury Goods Resale

Rebag Secures $33 Million in Series E Funding

Rebag, a platform specializing in the buying, selling, and trading of high-end luxury goods such as handbags and accessories, has successfully completed a $33 million Series E funding round. This investment follows a period of significant technological advancement and expansion into new product categories for the company.

Early Beginnings and Growth

The company was initially profiled in 2015, then known with a slightly different spelling, having already secured $4 million in seed funding. At that time, Rebag aimed to challenge established players in the luxury resale market, like The RealReal.

Novator spearheaded the recent funding round, with contributions from current investors, notably General Catalyst. This brings the total funding raised by Rebag to $101 million.

Financial Performance and Market Dynamics

Charles Gorra, Rebag’s founder and CEO, indicated that the company’s valuation has increased substantially since its previous funding round. The prior Series D round in 2020, also led by Novator, totaled $15 million.

Initially, the pandemic created uncertainty, prompting Gorra to utilize the $15 million as a financial buffer. However, the company experienced robust revenue growth, achieving a 50% increase in 2020 and an estimated 70% growth in 2021.

Gorra attributes this success to the accelerated digitization of industries, particularly the luxury sector, driven by the COVID-19 pandemic. Prior to 2020, luxury goods purchases accounted for 8% of U.S. retail sales, a figure that has now risen to approximately 20%.

Shifting Consumer Preferences

A noticeable trend has emerged: consumers are opting to own fewer items, but prioritizing higher quality, durability, and resale value in their purchases. This is particularly relevant in the luxury market, where Rebag’s average transaction value is $2,000, necessitating a high level of customer trust.

Expansion into New Categories and Technological Innovation

Over the last year, Rebag has seen a fourfold increase in sales within new categories like fine jewelry and watches. This growth is directly linked to the company’s enhanced sourcing capabilities, facilitated by the launch of its Clair AI and Clair Trade technologies in 2020.

The marketplace currently boasts an inventory of over 30,000 items. Clair is a proprietary software suite capable of instantly identifying and pricing items from the top 50 luxury brands, either through a mobile app or image upload, and providing an immediate purchase offer.

Furthermore, the Clair Trade tool enables instant trade-in transactions, streamlining the buying and selling process.

Future Plans and Retail Strategy

The newly acquired capital will be allocated to further development of these technological tools, expansion of the company’s 150-person workforce, and increased marketing efforts.

Rebag currently operates seven physical stores in key locations including New York, Los Angeles, Miami, Beverly Hills, and Greenwich, Connecticut, with plans for further expansion throughout 2022.

Gorra emphasized the favorable venture capital market conditions, stating that the company strategically capitalized on the opportunity to accelerate its funding.

Enhancing the Retail Experience

Rebag has modernized its retail locations with high-tech features, including the “Clair Corner,” a self-service kiosk providing instant price quotes for items being sold. The “Rebag Bar” in New York offers a personalized digital shopping experience, allowing customers to complete purchases and payments within an hour.

Market Position and Competitive Landscape

While the luxury resale market is still developing – currently, only one in ten luxury items are sold through resale channels – the overall secondhand market is projected to reach $77 billion by 2025, according to ThredUp.

Rebag identifies The RealReal and Poshmark as its primary competitors. However, the company highlights significant differences in average transaction values: $500 for The RealReal, $30 for Poshmark, compared to Rebag’s $2,000.

A key differentiator for Rebag is its direct control over the purchasing and selling processes, unlike some peer-to-peer platforms where transactions can be delayed due to individual management of each side of the deal.

“Our focus is on the high-end goods market, and we aim to be the trusted destination for premium resale,” Gorra stated. “We aspire to be a leader in this evolving space and contribute to the growth of a robust resale ecosystem.”

Note: This article was updated on December 15th at 8:42 a.m. to reflect a revised funding round size of $33 million, down from the initially reported $35 million.