Vestiaire Collective Secures Significant Funding

Vestiaire Collective has recently completed a new round of funding, successfully raising $216 million, equivalent to €178 million. This investment has propelled the company’s valuation beyond $1 billion, officially establishing it as a unicorn within the tech industry.

Leading this funding round are French fashion and luxury conglomerate Kering, alongside Tiger Global Management. As a result of this investment, Kering now holds a 5% stake in Vestiaire Collective.

The Vestiaire Collective Marketplace

The company operates as an online marketplace specializing in pre-owned luxury and fashion items. Navigating this sector requires careful attention, as consumers need assurance against receiving damaged goods or counterfeit products.

To address these concerns, Vestiaire Collective implements quality control and authentication procedures for certain items prior to sale. Furthermore, a reimbursement policy is in place for purchases made via direct shipping should discrepancies arise.

Investor Participation

Beyond the lead investors, a broad spectrum of existing shareholders participated in this funding round. These include Vestiaire Collective’s CEO, Max Bittner, as well as Bpifrance’s Large Venture fund, Condé Nast, Eurazeo through Eurazeo Growth and Idinvest Venture, Fidelity International, Korelya Capital, Luxury Tech Fund and Vitruvian Partner.

Growth Driven by External Factors

The current climate, marked by restrictions on travel and in-store shopping, has significantly benefited online fashion retailers. Vestiaire Collective has experienced substantial growth, with transaction volume doubling in 2020 compared to the previous year.

The platform now sees an average of 140,000 new listings added each week, demonstrating its increasing popularity.

Sustainability and Consumer Trends

Growing consumer awareness regarding the environmental impact of the fashion industry is also contributing to Vestiaire Collective’s success. Traditional retail models, particularly fast fashion, often promote frequent purchases driven by rapidly changing trends.

Conversely, luxury brands are often hesitant to discount items, as this could devalue their brand image. Vestiaire Collective provides a compelling alternative for consumers seeking durable, high-quality goods and a means to responsibly dispose of unwanted items.

Expanding Global Reach

Initially focused on the European market, Vestiaire Collective is now experiencing rapid expansion in both the U.S. and Asia. According to Tiger Global partner Griffin Schroeder, local sellers in these regions increased their sales by over 250% year-over-year as of January 2021.

Future Plans and Sustainability Goals

The newly acquired funding will be allocated towards strengthening partnerships with brands through buy-back circular solutions. The company also intends to incentivize a “one-in, one-out” approach, encouraging users to sell items when making new purchases.

Vestiaire Collective has committed to achieving carbon neutrality by 2026 and pursuing B Corp certification. Additionally, the company plans to expand its technology team by hiring 155 new personnel.

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