NEW YORK, United States — Investors can’t seem to get enough of the resale business.
Vestiaire Collective, a Paris-based social commerce platform, completed a €40 million ($45 million) round of financing led by Bpifrance and Chief Executive Max Bittner on Thursday, citing plans to launch new technology and expand to markets in Asia and the Middle East. The Vestiaire platform allows users to not only buy and sell items but also communicate with one another — a feature that differentiates it from other leading vintage luxury services.
So far, Vestiaire Collective has raised €149 million ($167 million) in funding. Its current shareholders include Eurazeo, Vitruvian Partners, Idinvest Partners and Balderton Capital, which all participated in the latest round. Vestiaire is only latest reseller to raise capital for expansion, following The RealReal’s IPO filing earlier this month and Neiman Marcus' acquisition of a minority stake in Fashionphile in April.
“We see our role as educating and expanding the resale ecosystem, and connecting the right buyers with the right sellers,” said Bittner, who became Chief Executive of Vestiaire in January 2019, replacing Co-founder Sébastien Fabre.
Previously, Bittner was the founder of Lazada Group, a major e-commerce company in Southeast Asia. As Vestiaire’s new chief executive, he was tapped to lead its international development with a focus on Asia. So far, progress has been promising: in the second quarter, gross merchandise volume in the region grew by 140 percent, the company said.
With its new funding, Vestiaire will invest in features that allow its users to engage better with one another on the mobile app, Bittner said. Already, customers can ask one another questions about listings and negotiate pricing. Additional capital will enable further community-building functions as well as a significantly increase the company’s tech and data teams. So far, about 70 percent of Vestiaire’s sales are through the mobile app.
Since Bittner came to office, the company has hired 120 new employees, and plans on further increasing the headcount, which now totals 370 full-time staff members, over the course of 2019. He chose to personally invest in the business — a somewhat unorthodox move — to underscore his confidence in the category, and Vestiaire itself.
"I not only believe in the the huge potential of the resale market and its importance in making consumer behaviour more sustainable, but in Vestiaire’s continuing role as a pioneer of the industry," he said.
The resale market is slated to reach $51 billion by 2023, and has seen exceptional momentum in recent months. Online consignment platform The RealReal filed for an initial public offering earlier this month, hoping to raise $285 million on the Nasdaq stock exchange for a valuation of $1.57 billion. Meanwhile, handbag reseller Rebag raised $25 million in a Series C funding in February with plans to open 30 stores in the US.
Millennials have largely fuelled the emergence of resale, erasing the stigma of second-hand fashion while embracing its lower prices and environmentally conscious supply chain.
“On one hand, there’s the economic component around younger consumers who are looking for aspirational brands, while on the other, there’s a pervasive level of consciousness on the impact of the fashion industry,” said retail consultant Doug Stephens.
Even retailers are getting in the resale game. In addition to Neiman Marcus, Farfetch announced its own pilot program that allows users to trade in their worn items for store credit.
“I think anyone in the fashion industry has got to look at the meteoric growth of the resale market right now and say, ‘We’ve got to be getting something out of that,’” Stephens added.