Today Vestiaire Collective, a second-hand fashion scaleup, announces the completion of a new €178 million financing round and its new unicorn status, backed by global French luxury group Kering (KER.PA) and US investment firm Tiger Global Management. Existing shareholders also re-invested in this round, including Vestiaire Collective’s CEO, Max Bittner, Bpifrance (Large Venture), Condé Nast, the Eurazeo Group (Eurazeo Growth and Idinvest Venture) (RF.PA), certain funds managed by Fidelity International, Korelya Capital (backed by NAVER) (KRX: 035420), Luxury Tech Fund (LTF & Cuir Invest) and Vitruvian Partners.
The pre-owned fashion sector has experienced rapid growth over the last three years with a further acceleration during the pandemic. This has been predominantly driven by younger consumers’ increased focus on sustainability and a growing trend for social shopping and online communities. The scaleup states that the amount of secondhand pieces in people’s closets is predicted to grow from 21% in 2021 to 27% in 2023 with the value of the secondhand sector forecasted to be worth over $60 billion by 2025.
Maximilian Bittner, Vestiaire Collective’s CEO commented on the funding round: “This latest round of investment confirms the incredible trajectory of Vestiaire Collective, founded during the 2008 crisis, the model has clearly demonstrated its ability to continue to thrive during challenging conditions. The resale sector as a whole is experiencing rapid growth, especially amongst Millennial and Gen Z consumers, which will come to shape the retail landscape of the future. We are incredibly excited to welcome Kering and Tiger Global Management, both of which will be instrumental in our mission to build a more sustainable fashion industry and further grow our incredible global community”.
Lead investor Kering and Vestiaire Collective share a joint vision in their commitment to driving innovation to build a more sustainable fashion industry for the future. François-Henri Pinault, Chairman and CEO of Kering, said: “Pre-owned luxury is now a real and deeply rooted trend, especially among younger customers. Rather than ignoring it, our wish is to seize this opportunity to enhance the value we offer our customers and influence the future of our industry towards more innovative and more sustainable practices. This fits naturally with our entrepreneurial spirit, our pioneering sustainability strategy, and our modern vision of Luxury.”
Griffin Schroeder, Partner of lead investor Tiger Global, commented: “We are excited to support Vestiaire Collective’s continued global expansion plans, which focus on seizing the momentum of already spectacular growth in the United States and Asia Pacific. As of January 2021, local sellers in those regions had increased their items sold by more than 250% year-over-year.”
Since its inception in 2009, Vestiaire Collective’s mission has been to extend the lifecycle of products in the fashion industry, supporting a disruptive move towards a circular economy by empowering a community of ‘fashion activists’ to drive profound change. With its combined pillars of global community, strong fashion and sustainability DNA and the high level of trust it has built on the platform, Vestiaire Collective is uniquely positioned to capture an increasing share of the global resale market, demonstrated by its 90% year-on- year membership growth achieved in 2020.
Vestiaire Collective will use this financing round to scale up its technology and data innovation roadmap, accelerating its circularity vision along with initiating strategic change in the fashion industry. This will be supported by a sustainability roadmap focused on 4 main innovative pillars: triggering change in luxury fashion; empowering and growing its community of ‘fashion activists’; reducing environmental footprint and becoming carbon neutral by 2026; being an exemplary B Corp certified business.
Soon the business will also more than double the size of its technology team, generating 155 new positions, available across data science, engineering, tech and product development. This will enable the platform to further support its community through increased functionalities such as profile and product recommendations based on users’ behavior, a dynamic pricing algorithm that gives real-time feedback to sellers and a digital wallet function will help incentivize sellers to reinvest in pre-owned.