Diamonds may be a girl’s best friend, but so are designer heels, Chanel purses, and fine leather jackets, particularly when they are at a price she can afford.
The RealReal has raised $14 million to grow its luxury online resale marketplace, which it claims is “second only to eBay.” The startup’s team of professional stylists and fashion experts hand-select and authenticate pre-owned designer goods from brands like Chanel, Dior, Gucci, Hermes, Louis Vuitton, and Cartier. The goods are sold in 72 hour flash sales for prices at up to 90% off the original cost.
For style mavens who can’t afford to shell out thousands of dollars for a Dior dress or Gucci blazer, The RealReal makes high fashion more accessible. Women also have the opportunity to sell their own stockpile of luxury items, to then (of course) buy different ones.
“We’re changing the way people view their designer wardrobe and luxury items,” said The RealReal founder and CEO Julie Wainwright. “We offer consignors a way to get a return on what they originally paid for their designer items, effortlessly and lucratively.”
When trying to build a marketplace for luxury goods, trustworthiness is key. No one want to pay $400 for a Hermès scarf. The RealReal tackles the uncertainty of buying luxury goods online with its team of “tastemakers” who are responsible for hunting items that “embody timeless luxury” and carefully examining each for authenticity. The stylists also work directly with people who want to resell their designer clothing, shoes, handbags, accessories, and jewelry to assess whether their goods are eligible for sale. Shipping is free and consignors receive between 60 and 70 percent of all sales.
In two years, The RealReal has grown its member base to 750,000 and attracted 1.5 million unique visits in January alone. The startup ships over 15,000 luxury items a month and claims to have a 75 percent sell-through rate for its flash sales. Its revenue has grown tenfold in the past year. The company will use this second round of funding to expand its infrastructure to support this impressive growth.
InterWest Partners led this round, with participation from existing investors Canaan Partners, e.ventures, and Greycroft Partners. Novel TMT Ventures, Panarea Capital, author Suzy Welch, and Sukhinder Singh Cassidy also made strategic investments.