Online thrift store Tradesy raises $ 67 million
Tracy DiNunzio wants to kill fast fashion.
Founder and CEO of Santa Monica-based Tradesy, DiNunzio said that over the past decade, consumers have recognized the detrimental effects of fast, cheap and fast fashion on the global climate. She argues that in addition to being environmentally conscious, buying and reselling high-end fashion items can also be affordable.
âWe’ve always focused on luxury and it’s not because we love Louis Vuitton bags,â DiNunzio said, referring to the site’s most popular item. “We chose luxury because they are the most durable goods that exist and the demand is the highest and the most resilient.”
Investors adhere to this mission.
Tradesy recently raised $ 67 million in a Series D funding round led by Foris Ventures. Since its inception in 2009, the company has raised $ 149 million. DiNunzio did not disclose the valuation of the company.
The global second-hand luxury market experienced “strong growth” from 2015 to 2020, and market research firm IMARC Group expects the market to grow at a compound annual growth rate of 10.3% over the next five years.
While some may dismiss luxury items as reserved for the wealthy, DiNunzio said an early marketing analysis the company conducted showed the average household income for a Tradesy customer to be $ 65,000.
There are other advantages, she said, noting that luxury goods tend to retain their value. For example, a consumer can buy a bag for $ 500, keep it for a year, and then sell it for roughly the same price a year later.
âWe are finding that customers who might have thought luxury was out of reach are turning to resale and embracing resale,â she said. “Everyone wants better quality things and it’s just a matter of affording them.”
With the cash injection, Tradesy hired a new COO, Amy Gershkoff Bolles, who led the global data science team at eBay.
The company will also continue to develop artificial intelligence and machine learning technologies so that the resale experience can be “seamless” for buyers and sellers and to create a “personalized and organized” experience for buyers, a said DiNunzio.
It will also begin to invest more heavily in marketing, having relied primarily on organic growth in the past.
The market for low-end second-hand clothing is also booming.
thredUp, an online consignment and thrift store, went public earlier this year with a market cap of $ 1.3 billion. Etsy acquired Depop, a fashion resale market targeted for Gen Z, this summer for $ 1.6 billion, mostly in cash.
DiNunzio said that Tradesy sets itself apart from its competition because it is a peer-to-peer platform, so the company has no inventory and luxury items have a high average order value. Sellers need a 19.8% commission. They also authenticate online, eliminating the need for shipping.
âIt’s pretty much the cheapest and least impactful way for people to get a new order when they want it,â she said.
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