Dive Brief:
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Used-clothing start-up thredUP has garnered $81 million in a funding round led by Goldman Sachs, bringing its total to more than $125 million.
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Meanwhile, Paris-based Vestiaire Collective also recently garnered $37 million to fund its goals for growth in the U.S.
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Both companies launched in 2009. Vestiaire Collective has a high-fashion focus and investors include Vogue publisher Condé Nast, while thredUp combs through a wider range of labels to make sure clothing is in good enough shape for re-sale.
Dive Insight:
There’s nothing new about selling used clothing — you might call it a second-hand idea — but start-ups like thredUP and Vestiaire Collective are bringing enough twists to the idea to merit the “disruption” label. Other used clothing start-ups are also attracting investors, including Poshmark, TheRealReal, and Twice. Twice was acquired by eBay earlier this summer.
ThredUP launched in 2009 but didn’t find its groove — or the attention of investors — until it turned to kids clothing and developed its “clean-out bag,” which allows people to just ship over a bag of clothes that thredUP then cleans out and posts online for sale.
Its “clean-out bag” has been a hit with sellers that don’t want to deal with the hassle of online selling through, say eBay, or the pickiness of Poshmark and TheRealReal, which are focused on high-end fashion.
The hassle that thredUP takes care of is significant — it weeds through bags of clothes, taking ones that are sellable and giving the rest to charity (usually for the purpose being shredded for use in manufacturing), taking photos for the web, and posting them for sale. Sellers get their money in trade at first, but two weeks later can cash out through PayPal.
The company has a good handle on logistics and will spend its new cash on expanding its warehouses from its two — one in California and the other in Pennsylvania — to another each in Atlanta and Chicago.
Vestiaire Collective, meanwhile, will use its infusion to expand globally, including in the U.S. That will only heat up the space that much more.
