As a result of economic crunches and the desire to make responsible and less wasteful fashionable clothes, the marketplace for second-hand clothes sometimes called the “circular economy” has been on the rise in the last few years.
The uprise of platforms that are bringing the sales and purchases of used clothes outside the charity shop has also been an additional factor in the growth of the industry.
Vinted, a second-hand fashion site has raised about $140.9M (£128M) in a round moderated by Lightspeed Venture Partners with the full backing, participation, and support of Springs Capital, Insight Venture Partners, Burda Principal Investments, and Accel.
The startup founded and which has its headquarters in Vilnius, Lithuania has been able to use the investment to reach a valuation of over $1B ( exact amount not specified) thus, making it one of the country’s biggest startups (Reports indicate that the Vinted’s Estonian competitor, Bolt, the Uber company formerly known as Taxify, is also valued at over $1B.
The company plans to use the money for its further expansion in Europe and the building of more features on its platforms for the improvement of the process of buying and selling, not drifting away from its goal of providing a platform for consumers to list and buy second-hand fashion.
CEO of Vinted, Thomas Platenga, made a statement in an interview that the company wants to make sure it doesn’t have new products.
He added that all the sellers are regular people and about 75% of its customers have never bought or sold second-hand clothes in their lives prior to their joining the platform. He finally started that there is no longer any stigma.
Founded by Milda Mitkute and Justas Jankauskas in 2008, the company has experienced rapid expansion. Vinted was initiated to help Mitkute clear out her wardrobe after a house move.
The company, however, has had its own share of troubles as it was close to being shut down in 2016 but was turned around when investors brought in Platenga. Under his leadership, the business model has changed to make the cost of listing clothes as low as possible and that caused a remarkable change in the company’s growth.
Vinted went through some rapid changes. One of which was clawing back a lot of its pricey international strategy alongside the costs associated with it. Secondly, all listing fees were removed to encourage more people.
Now, just a 5% commission is charged if you conduct transactions on Vinted itself, bundling in buyer protection and shipping to make the deal juicy (listing, sales, and purchases are still for free if you buy offline although you won’t enjoy these benefits).
Two years later, in 2018, the company bounced back and raised €50M. As of today, Vinted has 25 million registered users in 11 markets, about 180 million products live on its platform, and 300 employees.