Luxury Consignment Site RealReal Raises $20 Millionby
RealReal, a consignment website that sells unwanted luxury goods harvested from the homes of their original owners, has raised $20 million in venture funding, the company announced on May 6. The series C round nearly doubles the amount the San Francisco startup has raised to date.
Julie Wainwright, the company’s founder and chief executive, told Bloomberg Businessweek last year that getting ahold of enough second-hand designer clothes, bags, and accessories has always been the business’s limiting factor. The company, which began in 2011, has resold more than 450,000 luxury items. Wainwright said last year that 2013 revenue was expected to be more than $50 million. And the company has expanded beyond clothes and accessories to sell art as well.
RealReal is part of a wave of fashion e-tailers that followed the initial success of Gilt Groupe, which pioneered online flash sales. “You’ve seen a lot of people refine and riff off of the Gilt experience,” Maha Ibrahim, a venture capitalist at Canaan Partners, told me last year. Canaan, an earlier investor in RealReal, participated in the current round, along with DBL Investors and others. Focusing on high-margin items means a website can turn a healthy profit with fewer customers. “I’d much rather be selling one $2,000 handbag than 100 $20 t-shirts. It’s a lot easier,” Ibrahim said.
RealReal emphasizes that it verifies the products it resells—and many of its consignors are also customers. Wainwright said last year that the business was healthy and didn’t need more investment to sustain itself, but ”we most likely will take in money for growth and expansion overseas.”