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Second-hand marketplace thredUP is announcing a large $81 million round of investor funding led by Goldman Sachs Investment Partners. The new money is aimed at growing the company’s consumer base.

ThredUP is one of an increasing number of niche online marketplaces that offer a more curated experience than used-wares giant eBay. ThredUP deals exclusively in used apparel, buying up old clothes from consumers for 10-80 percent of resale value, depending on the brand. Plus, those who sell their clothes to thredUP don’t have to worry about listing items or shipping them to buyers. Instead, sellers can send a bag full of clothes to one of thredUP’s distribution centers where items will be sorted, valued, and entered into thredUP’s marketplace. Sellers who want to be paid upfront will be compensated as soon as their threads are processed. Those who prefer to consign clothing get paid when their items sell.

For people who don’t want to handle the intricacies of selling their clothes on eBay, thredUP is developing a reputation as a good alternative. Other marketplaces have also realized the benefit of making it easier for consumers to part with their stuff. The RealReal, for instance, which buys and sells luxury apparel and handbags, sends a concierge to potential sellers to evaluate and then buy up gently used high-end fashions.

To make room for more inventory, thredUP plans to use this fresh round of funding to build out its network of distribution centers. Already the company has two centers, one on the East Coast and one on the West. Two more such facilities are in the works. One is slated for the Chicago area and another for outside Atlanta, in Georgia. The increased number of warehouses will help thredUP take in more apparel and respond to demand for its stock.

How big of a demand? That may be hard to calculate. CEO James Reinhart estimated that the apparel resale market in the U.S. is a $30 billion industry and growing, asserting that more people will go to a thrift shop this year than to a traditional retail outlet. Desire for used goods has gone up in the U.S., he said, because of changing perspective on what it means to buy goods second-hand.

“There was a time when we bought used cars, now we buy certified pre-owned. We used to buy used electronics, now we buy refurbished,” he explained. It’s true the language around worn wares has evolved, though this seems like a marketing tactic more than an indication that people are more interested in buying used. However, there may be another explanation for why we are more wiling to buy pre-owned stuff.

Three years ago the National Association of Resale Professionals noted that resale businesses grew 7 percent year-over-year from 2010-2012. The theory at the time was that the recessed economy was causing people to shop with price in mind and make concessions for lower prices, like buying used instead of new. As the U.S. economy brightens, many may carry over some of their disciplined spending habits.

That bodes well for thredUP. The company said it had 1.8 million visitors to its site in August 2015 (more than double the number that visited during the same time last year) and has 4 million registered users.

In total, the company has raised $125 million in investor funding to date from Trinity Ventures, Redpoint Ventures, Highland Capital Partners, and Upfront Ventures.


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