$173 Million Later, The Real Real Is Officially Consignment Queen
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The new funding comes just in time for the retailer to open its first store.
While it’s fair to say e-commerce has totally changed shopping — putting mall brands out of business and spawning a new category of fast fashion retailers on steroids — the luxury market has had a harder time breaking out online. High-end brands are notoriously uneasy about e-commerce for fear of eroding exclusivity, and sites like Amazon, Alibaba, and eBay, riddled with counterfeit goods, have not proven to be great business partners.
You can get your Louis Vuitton and Hermès another way though: The secondhand market has found a way to make luxury and online shopping work, and San Francisco-based site The Real Real is leading the sector. This morning, it confirmed it’s just closed on $50 million in funding from private equity firm Great Hill Partners. The startup’s largest amount of funding to date brings the total amount it’s raised to $173 million. The upcoming wad of cash will go toward expanding the business, which consists of more than 800 employees and three giant fulfillment centers, and a company spokesperson confirms The Real Real will eventually file for IPO, though there are no current plans in the works.
The RealReal is one of many secondhand luxury shopping companies that have leveraged the ease of the internet and enticed shoppers to buy and sell luxury online (although not all have survived). But while sites like Tradesy, ThredUp, and Vestiaire Collective have cashed in on this previously untouched sweet spot, The Real Real remains the fastest-growing of the bunch; even the Kardashians and Saudi princesses use it. The site boasts five million users, has sold four million items to date, and is expected to surpass $500 million in revenue this year.
Read more at Racked.com.